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AUG 2 1985 





Press of Geo. C. Rand & Avery, 3 Cornhill. 


The prevalence of erroneous impressions rela- 
tive to our real condition, the tendency of which 
is to encourage general extravagance, excessive 
importations, and a prolongation of the war, has 
induced me to give expression in the following 
pages to a few thoughts upon the subject, based, 
as I believe, upon right principles, for the pur- 
pose of correcting popular misapprehension, and 
arousing the public mind to the consideration of 
the actual condition of our affairs, the right 
appreciation of which is so essential to our pros- 
perity as a nation. 

In speaking of the North, says Mr. Cobden : 
" They are mistaken if they think they can carry 
on a civil war like this, drawing a million of men 
from productive industry, to be engaged in the pro- 
cesses of destruction, — to spend £1,500,000,000, 
— they are deluded if they think they can carry 
on a war like that without a terrible collapse 
sooner or later, and a dreadful prostration in 
every part of the community." 

A. W. S. 





1. General impressions relating to prosperity. 

2. These popular impressions one reason why the war is not prose- 

cuted with more vigor. 

3. This so-called prosperity a delusion. 

4. Illusive prosperity generally precedes misfortune. 

5. Correction of popular errors. 

6. True elements of prosperity. 

7. An examination of our material prosperity. 

8. Government consumption destructive of capital. 

9. Productive employment of capital essential to real prosperity.. 

10. Some elements of illusive prosperity. 

11. The delusive character of these elements. 

12. Enormous expenditures the main-spring of industrial activity. 

13. A new element in political economy. 

14. When industry is the offspring of debt, the community cannot be 

considered prosperous. 

15. A speedy and successful termination of the war the only security 

for prosperity. 

16. Blindness to our real condition is not the result of industrial activ- 

ity alone. 

17. Consideration of national debt and currency. 

18. National debt contracted without the reception of an adequate value. 

19. Erroneous impressions relative to paper money. 

20. Present issues of paper money, and debt. 

21. Character of a paper currency. 

22. Operation and effects of money. 

23. Liability of paper to depreciate. 

24. Gold and silver, recognized standards of value. 

25. How to prevent depreciation of paper. 

26. Instability of paper currency. 



27. Increase of money and enhanced prices no evidence of augmented 

wealth or value. 
2S. Some evidences of the depreciation of money. 

29. Only two methods of depreciation. 

30. Over-issue of paper a direct cause of enhanced prices. 

31. The volume of currency increased, its value becomes diminished. 

32. Views of Secretary Chase. 

33. The Hon. Secretary very inconsistent. 

34. Bank issues not the originating cause of a depreciated currency. 

35. The large over-issue has proceeded from the Government. 

36. Contraction of issues would increase and expansion decrease the 

value of the currency. 

37. Suppression of all bank circulation desirable. 

3S. Reduction of the currency the only way of return to the " normal 
condition of prices and business." 

39. Price of gold, and ratio of depreciation. 

40. Other causes besides depreciation enhance prices. 

41. Those causes operate universally, but in the United States are al- 

lied with a depreciated currency. 

42. Effects of enhanced prices as seen in the clearing houses of New 

York and Boston. 

43. The volume of currency increased, all commodities bear their pro- 

portion of the " augmented mass." 

44. Over-issue of paper an expensive undertaking, and burdensome to 

Government and people. 

45. Insatiable demand for more. 
40. An additional issue disastrous. 

47. Public welfare demands a contraction. 

48. The method to accomplish it. 

4'j. Stability of value craved by the people. 

50. Issue of legal tender a fearful responsibility. 

51 . Immense power of the Secretary of the Treasury. 

52. Our apparent prosperity an illusion. 

53. In extricating ourselves from this abnormal condition, we shall 

discover our real position. 


Section 1. Throughout the loyal States 
the hum of human industry is heard, labor 
is fully employed, human skill and ingenuity 
are opening new channels of production, 
new schemes and enterprises are constantly 
brought forward and prosecuted with ener- 
gy, trade is active, and money plenty ; and, 
everywhere, in the marts of trade, in the 
legislative hall, at the stock exchange, and 
the political gathering, are heard rejoicings 
over our prosperity. 

Eemote from the scene of conflict between 
contending armies, ignorant of the horrors 
of war, and experiencing but little inconven- 


ience, and, as we think, large profits from its 
destructive powers, we are living happily 
under the impression that we are " prosper- 
ous; ' and are, to an alarming extent, indiffer- 
ent respecting its speedy and successful 

2. Our so-called " prosperity " has had 
the effect to draw off our attention, al- 
lay our excitement, quiet our fears, and 
stupefy our sensibilities relative to the great 
conflict in which we are engaged ; and the 
principal reason why men do not volunteer 
with alacrity is because of this delusive pros- 
perity which abounds at home. There is 
no want of able-bodied men, for our streets 
are filled with them ; but it is because 
neighbors, friends, and companions are sup- 
posed to be making their fortunes by spec- 
ulations, or because labor is completely 
supplied with steady employment and high 
wages, that even the heavy bounties pro- 
vided do not offer sufficient inducements 


for men to enter the service. Thus it is 
that this nominal prosperity, which is to 
a great extent the product of the war, is 
the proximate cause why war languishes 
for want of men to fill up its armies. 

o. It appears to me, however, that this 
" prosperity " is to a great extent a popular 
delusion, that it rests upon a fictitious basis, 
and although presenting to the public mind 
a specious and plausible appearance when 
clothed in its a glittering generalities," it is 
nevertheless imaginary rather than real, 
and illusive rather than actual. Believing 
thus, and entertaining the conviction that 
the only way to secure prosperity, is by 
securing the speedy and successful termi- 
nation of the war, it seems desirable that 
some effort should be made to check the 
spread of this popular error, and bring the 
public mind to a more correct appreciation 
of our true condition. 

4. Apparent prosperity generally pre- 


cedes disaster. In our own history we have 
experienced severe monetary disasters, the 
most, if not all of which have been imme- 
diately preceded by great apparent pros- 
perity, the sequel of which proved conclu- 
sively that our nominal prosperity was, to 
a considerable extent, a phantom, as it re- 
sulted in disaster to thousands who were 
deceived by its pretentious appearance. 

5. In attempting to correct a popular 
error, I am aware I have a difficult task 
to perform ; for popularisms, when they are 
supported by so many superficial appear- 
ances, and harmonize so beautifully with 
our feelings and desires, are with great 
difficulty overthrown. I approach the sub- 
ject, therefore, reluctantly. So general is 
the belief in "our prosperity," its super- 
ficial appearances are so fascinating and 
bewildering, that it seems almost unkind 
to disturb the tranquil course of thought 
by endeavoring to look beneath the surface. 


6. In what does true prosperity consist? 
A short and, I believe, a correct answer is. 
in the productive employment of labor. 
For it is by the labor of the people that all 
subsist, and, when that labor is actively and 
productively employed, when the capital 
and skill of the nation are united with the 
industry of the country in acquiring the 
greatest possible amount of produce, then 
it is that the nation may be said to be 
truly prosperous, and to become wealthy 
to the extent of its surplus products. Con- 
versely, it must be admitted that, when a 
large proportion of people are non-pro- 
ducers, and another large proportion are 
engaged in unproductive employments, 
that people cannot be said to be truly 
prosperous, as it is by the unproductiveness 
of labor that nations decay. 

In dealing with this question, I wish to 
abstract it from all political relations and 
associations, and view T it, so far as it relates 



to the wealth and productive prosperity of 
the country. It is, therefore, material and 
not political prosperity which we are to 

7. According to common report we 
have nearly one million men in the service 
of the government. These men, with 
thousands of office-holders, are non-pro- 
ducers, and the value of their labor is an 
absolute loss of productive capital to the 
country. Then, we have nearly a million 
engaged in unproductive employments, or, 
in other words, the manufacture of the 
materials of war, which is like the complete 
destruction of so much capital, as far as 
any increase of wealth is concerned. 

Says J. S. Mill, u By unproductive labor 
will be understood labor which does not 
terminate in the creation of material 
wealth ; which, however largely or success- 
fully practised, does not render the commu- 
nity, and the world at large, richer in mate- 


rial products, but poorer by all that is con- 
sumed by the laborers while so emplo} T ed." 

Our immense armies are therefore not 
only non-producers, but are destroyers and 
consumers of the capital of the country. 
And, while other labor produces more than 
it consumes, these classes produce compara- 
tively nothing, involving a loss to the coun- 
try, not only of the productive labor of 
these large classes, but also the losses which 
arise from waste and destruction of mate- 
rial incident to war. 

A vast amount of real capital or wealth 
is thus withdrawn from productive employ- 
ments, and annihilated. A value is thereby 
taken from the community without its 
receiving any in return, and that value is 

8. Government consumption, therefore, 
unless spent upon internal improvements, 
or other useful objects, is destructive of 
capital, and differs entirely in its character 


from the consumption of the community ; 
for, in the community, the consumer repro- 
duces by his labor more than he destroys, 
whereas, the government being a con- 
sumer and a non-producer, extinguishes 
the capital it consumes, and reproduces 
nothing. When speaking of capital, I do 
not wish to be understood as referring to 
money, for paper money is not capital ; but 
by capital, I mean the accumulated pro- 
duct of man's industry, available for his 
support, or which will produce other com- 

Paper money is simply a medium of ex- 
change for the transfer of commodities 
from one person to another ; and, when the 
government calls for a loan, it does not 
want money, but really wants commodities 
to consume and to destroy. 

" Nations," says J. B. Say, " never bor- 
row but with a view to consume." He 
also says. " War costs a nation more than 


its actual expenses ; it costs, besides, all that 
would have been gained but for its occur- 

9. Had capital or commodities not been 
loaned to government, they would have 
been consumed reproductivelv, instead of 
unproductive!} 7 , and the wealth of the na- 
tion would have been thereby increased. 

"All material products," says Mill, " con- 
sumed by any one while he produces noth- 
ing, are so much subtracted, for the time, 
from the material products which society 
would otherwise have possessed." 

Labor and industry are therefore great 
promoters of wealth and prosperity, and if 
we wish to increase our wealth, or attain 
real prosperity, we must not only have our 
labor industriously and actively employed, 
but it must be employed profitably, in pro- 
ducing those material products which are 
valuable to society. 

In spite of all this, it may be said never- 


theless, we are prosperous ; for it is apparent 
to every observer. 

10. Now, having discovered some of the 
elements of true prosperity, let us specify 
some of the characteristics of this apparent 
or specious prosperity. In relation to it, 
Dr. Wm. Elder says, tt The knowledge of 
our immensely enhanced activity in all 
branches of industry is brought home to 
everybody in the Free States, by the almost 
perfect distribution of its benefits." 

" It is estimated that the manufacturing 
industry of the present year (1863), in the 
loyal States, is nearly equal to that produced 
in 1860, and when we consider the loss of 
our Southern customers, who took six times 
more of our products than all the world 
besides, such results awaken wonder." Other 
significant signs of prosperity are said to be 
the millions of property liberated from in- 
cumbrances, the large increase in number 
of depositors, and deposits in the Savings 


Banks, the abundance of money, and property 
on the rise. 

The above are some of the prominent 
indications of this prevailing prosperity. 

11. Now, considering the character of a 
gigantic war, in its consumption of products, 
its immense destruction of material, and its 
consequent enormous expenditures, it can- 
not be considered very surprising or won- 
derful that the remaining labor should find 
employment, and that nearly all branches 
of business should experience " enhanced 
activit}'." Hence, before adopting the con- 
clusion, that all this manufacturing industry, 
and apparent wealth, is proof of our prosper- 
ity, it would be well to examine into its 
causes and results. 

The great primary cause is the demand 
of the government upon the farmer, the 
woollen manufacturer, the ironmonger, the 
papermaker, the tanner, and other artisans 
and producers, too numerous to mention, for 


the supply of a large army in the field, and 
a large army of public officials out of it, which 
inevitably furnishes a constant stimulant to 
traffic, the effects of which are felt through- 
out the whole fabric of society. 

It is thus that the loss of our Southern 
customers, who were producers, is made up. 
An army of government customers, who are 
non-producers, have taken their places at the 
marts of trade ; and hence, instead of obtain- 
ing products in exchange for our commodi- 
ties, Ave are receiving debt, or mortgages upon 
the property of the people, and this is called 

That the expenditure of hundreds of mil- 
lions of dollars per annum, with the with- 
drawal of a large army of laborers from 
productive employments should stimulate 
industry and " enhance its activity " is not, 
therefore, a matter of so much u wonder ; " 
while the assertion that such a condition of 
things is an evidence of prosperity must be 
a great error of judgment. 


For instance, suppose a nobleman, possess- 
ing a large estate, occupied by one thousand 
laborers, should authorize his son to withdraw 
a considerable portion of them from their 
productive employments to indulge in idle- 
ness, while another portion were engaged in 
the manufacture of materials, which those 
indulging in idleness destroyed, w T e should 
readily perceive that the remaining portion 
would be actively and industriously employ- 
ed in providing for themselves, and for the 
large body of their fellow-laborers withdrawn 
from productive employments. Then sup- 
pose the son to be short of money, and, by 
an agreement and with the indorsement of 
his father, is allowed to issue promissory 
notes and bonds to sustain his prodigality, — 
could that estate be termed prosperous? 
Would it not be a specious or imaginary 
prosperity because created and sustained by 
debt ? Is it not in some aspects a fair illus- 
tration of our position ? Is not this gigantic 



war, and its consequent enormous expendi- 
tures, by promises to pay, the mainspring 
of our present national industry ? And is 
not this national industry created and sus- 
tained by debt ? 

12. That this war, and consequent war- 
debt, is the mainspring of our present na- 
tional industry, and the symbol of so-called 
prosperity, I need only refer to the able 
Report of the Bank Commissioners of Mas- 
sachusetts for 1862, who, after a thorough 
investigation, say, " It becomes necessary to 
show the effect of the war on the business of 
the Commonwealth " : — 

"At the breaking out of the Rebellion, it 
was feared that the business of the country 
would be entirely prostrated, and the banks, 
which make their gains out of the activity 
of trade, expected to be the greatest sufferers. 
Neither of these fears has been justified by 
the event. Seldom, if ever, has the business 
of Massachusetts been more active, or profit- 


able than during the past year. The war 
has brought into activity many mechanical 
employments for which there is little occa- 
sion in time of peace ; such, for example, as 
the manufacture of arms and ordnance, camp 
and garrison equipage, saddlery and artillery 
harness, and military clothing and accoutre- 
ments. It has also greatly stimulated the 
manufacture of boots and shoes, and of wool- 
len goods ; while the subsistence of the army 
has furnished a constant and remunerative 
market for breadstuffs and provisions. There 
is hardly a branch of domestic industry which 
has not been actively employed. * * * 
Nor has the condition of the operatives 
deprived of their usual employment been 
materially impaired. So great has been the 
draft upon the male population to fill the 
army, that there has been an unusual demand 
for men's labor in other directions, while 
female operatives have found occupation in 
the manufactories of clothing, &c. 


u The railroads of the Commonwealth were 
never more profitably employed, and they 
have made larger dividends, and their stocks 
have borne a higher price, than at any 
former period. The vast grain crops of the 
West have sought a market on the seaboard 
or in foreign countries, and having been 
deprived of their usual water-carriage by 
the closing of the Mississippi, have poured 
through the canals, and over railroads lead- 
ing to New York and Boston. The carriage 
of troops and army supplies has, also, fur- 
nished a considerable business, even to the 
New England roads, while those of the Mid- 
dle and Border States, leading toward the 
seat of war, have been completely occupied 
with the new traffic. 

"The loss of the cotton crop, and the 
closing of the seaports and great rivers of 
the South seemed likely to destroy the oc- 
cupation of our mercantile marine; but 
here, again, new channels of business have 


arisen, and anxieties have been dispelled. 
The necessity of transporting great bodies 
of troops from point to point along the sea- 
board, and of furnishing them subsistence, 
has called into the service of the government 
a vast fleet of transports, for the hire of which 
the owners have received rates of compen- 
sation greatly exceeding the ordinary profits 
of commerce. 

"Every steam-vessel, capable of navigating 
either the ocean, or harbors and rivers, has 
been thus employed; and many more, previ- 
ously regarded as worn-out, and no longer 
seaworthy, having been flimsily repaired, 
and made to pass through a hasty and cor- 
rupt inspection, have gone out laden with 
valuable property, or invaluable lives, to be 
wrecked or rescued, as the chances of weath- 
er or as skilful seamanship might determine. 
The shipyards, both public and private, have 
been worked to their utmost capacity, in 
the construction of iron-clad gunboats and 



other vessels of war ; while machine-shops, 
rolling-mills, and foundries, have been equal- 
ly busy in building their engines, rolling 
their armor-plates, and casting their guns. 
Nor has foreign commerce greatly declined, 
the grain-trade and the import of munitions 
and arms having come in to supplement the 
loss occasioned by the detention of cotton, 
* * * * In every department of labor 
the Government has been directly or indi- 

Such is the decision of our Massachu- 
setts Bank Commissioners, that it is debt, 
national debt, the consumption and destruc- 
tion of so much of the capital of the nation, 
which amount — an incumbrance upon the 
property of the people — has produced this 
industrial activity. 

13. Whereas, in former times, every ad- 
dition to the stock of one man's produce 
created a demand for another man's produce, 
and that was the constant stimulant of na- 


tional industry and wealth, now a new 
element in political economy has been dis- 
covered, in which nearly every addition to 
the stock of one man's produce creates a 
demand for government debt. 

Industrial activity, created by running 
into debt, is thereby termed a prosperous 
condition, To me however it seems far other- 
wise ; as it partakes of a somewhat similar 
character to that of the father, whose son, a 
spendthrift, squanders his father's fortune, 
burdens his estate with debt, thereby anni- 
hilating so much of his father's capital, to 
the loss of its productive employment. 

14. Debt is not and cannot be a healthy 
stimulant to prosperity, unless the amount 
of that debt has been spent in production. 
And if our national industry is the offspring, 
to any considerable extent, of the war which 
has created our great national debt, as all 
thoughtful minds must admit, such a condi- 
tion of things cannot, with any semblance of 
truth, be termed prosperous. 

If the rapid increase of debt — which is to 
a great extent the destruction of capital, and 
a mortgage upon the property of the citizens 
of the United States, for the payment of 
which their estates stand pledged — is the 
normal condition of prosperity, then indeed 
are we prosperous. 

But, if prosperity consists in the produc- 
tive employment of labor, the payment of 
debts, and the economical employment and 
accumulation of capital, then it cannot be 
said that we are prosperous. 

15. It is therefore necessary that as a 
people, we should remember, that no real 
prosperity can exist, and that the impover- 
ishment of the masses of our people must 
ensue, unless this war is brought to a speedy 
and successful termination. Says Ricardo, 
" It is by the profuse expenditure of gov- 
ernment, and of individuals, and by loans, 
that a country is impoverished." 

16. The prevailing blindness to our real 


condition is not, however, the result of the 
industrial demands of war alone, but it has 
been greatly promoted and fostered by the 
issues of a paper currency, and a bonded 
debt by the government. And this brings 
me to the consideration of our National 
Debt and Currency. 



17. Our National Debt is an almost com- 
plete annihilation of capital; nearly its 
whole amount having been withdrawn from 
productive employment — it stands to-day 
a mortgage upon the property of the peo- 
ple, the interest upon which must be met 
by taxes paid by the people. 

That we have abundant ability to sustain 
the burden of a large national debt, I have 
not the slightest doubt. That a debt, of 
reasonable proportions, distributed among 
the people, would have the tendency to 
unite us more compactly and steadfastly as 
an undivided nation, I believe susceptible 
of proof. And that Mr. Chase, the Hon. 
Secretary of the Treasury, has played his 


part with admirable shrewdness, tact, and 
skill, I fully believe. 

Nevertheless, I am of the opinion that 
debt created by war, and consequent de- 
struction of capital, cannot result in the 
material wealth and prosperity of the na- 
tion, whatever specious appearances it may 
possess. If, however, the hundreds of 
millions of capital destroyed, and debt creat- 
ed had been spent in improving rivers and 
harbors, the construction of railroads, the 
widening of canals, the advancement of 
learning, and the encouragement of science, 
all of which would have been a productive 
expenditure of capital, then indeed should 
we have been enabled to rejoice in our pros- 
perity as a people, and in the brilliant posi- 
tion we should have attained among the na- 
tions of the earth. 

It is often said, England is prosperous ; she 
sustains a large debt and so can we. This 
is all very true ; but we know not to what 


higher degree of prosperity she might have 
attained, had she not been burdened with 
debt ; for with all her prosperity, the mass- 
es of her people are impoverished. 

" The poor of Great Britain," says Joseph 
Kay — than whom no one is more competent 
to express an intelligent opinion — "are 
more depressed, more pauperized, more nu- 
merous in comparison to the other classes, 
more irreligious, and very much worse edu- 
cated than the poor of any other European 
nation, solely excepting Russia, Turkey, 
South Italy, Portugal and Spain." 

We do not, therefore, want to imitate Eng- 
land, — far from it, there the rich grow 
richer, and the poor poorer, — but we desire 
to raise the masses of liberty-loving Ameri- 
cans to a higher level, and to a more pros- 
perous condition, rather than oppress them 
with a burden of government taxation, 
which, in all nations, inevitably falls directly 
and indirectly upon the poor and producing 


18. Our national debt, although for a 
noble purpose, has been contracted through 
the deceptive character of a paper curren- 
cy, without the reception of an adequate 
value. The increased prices of commodi- 
ties produced by paper issues have very 
much enlarged it. The nation has been, in 
fact, an immense borrower of a depreciated 
currency, which it agrees to refund in spe- 
cie. In other words, we are borrowing com- 
modities at high paper values, which are fifty 
per cent, premium over their specie value, 
and agree to pay for them in specie. Our 
debt is therefore undergoing a rapid increase, 
because we thereby agree to pay $150 in 
gold for every $100 we receive. 

19. The doctrine of the celebrated John 
Law was, that money was the cause, and 
not the effect, of wealth ; and he favored 
large issues of paper money, as the high 
road to wealth. He tried the experiment, 
and met with complete disaster. 

O A 


111 our day, there are thousands who be- 
lieve and advocate the same doctrine. 

There is a general impression that the 
more paper money issued, the better ; and 
the idea is commonly entertained that the 
more of it we have, the more wealth we 
possess. In some quarters it is asserted that 
there is now an actual necessity for an ad- 
ditional issue of legal tender currency. Thus, 
the public mind appears confused by the de- 
ceptive character of our paper currency. 

20. The issue of legal tender currency 
was, on the 30th of September, $420,503,107 
— and the national debt inclusive, $1,222,- 
113,559.80 — which debt must be very con- 
siderably increased by outstanding claims 
against the government. 

21. Our paper currency consists of two 
kinds, one of which rests upon confidence, 
and the other upon authority. If we would 
preserve its value at par with coin, the 
quantity issued must conform to the amount 


required by the country to circulate its prop- 
erty and products at average specie values ; 
otherwise, it will be depreciated, or appre- 
ciated, as it is increased or decreased above 
or below its just proportion. 

22. Money is properly a medium of ex- 
change for the transfer of property between 
man and man ; it represents and measures 
value, and facilitates the exchange of pro- 
ducts, and is endowed with legal power to 
represent actual value. Every nation re- 
quires a certain amount of money sufficient 
to make its exchanges, transfers of property, 
and circulation of commodities, and it is 
Graduated or distributed among; them in ac- 
cordance with the general law of supply 
and demand regulating all values. 

" Gold and silver," says Bicardo, u having 
been chosen for the general medium of cir- 
culation, they are, by the competition of 
commerce, distributed in such proportions 
amongst the different countries of the world 


as to accommodate themselves to the natu- 
ral traffic which would take place if no such 
metals existed, and the trade between coun- 
tries were purely a trade of barter." There 
is then, we may say, a general level of val- 
ues, which are moved by the metallic circu- 
lating medium of the world. And when 
any one nation, by any method, increases 
its circulating medium, the values relative- 
ly remain the same, but the prices become 
enhanced, and those prices, in specie-paying 
countries check exports, while they increase 
imports, and turn the balance of trade 
against the country, until by the exporta- 
tion of specie, and consequent reduction of 
the currency, the circulating medium is re- 
stored to the general equilibrium. 

23. In countries where the currency is 
exclusively paper, the effect is somewhat 
different ; in those countries, the values re- 
main the same, and prices become greatly 
enhanced, but they do not have the same 


effect upon imports and exports, because as 
prices advance, the currency is inversely 
depreciated. If, therefore, the currency 
depreciates as rapidly as prices advance, as 
manifested in the premium on gold, then, 
although at higher prices, the values of gold 
and commodities are preserved at their just 
equilibrium, and scarcely any effect is pro- 
duced upon either exports or imports. 

24. Almost universally amongst the civil- 
ized nations of the earth, gold and silver 
have been selected as the standard meas- 
ures of value for carrying on their relations, 
because, of all commodities they are the 
least fluctuating in value. Gold has a rec- 
ognized and stable value throughout the 
world, which value is determined, as a gen- 
eral rule, by the cost of production ; and the 
direct tendency of this metallic commodity 
and currency, is to distribute itself where it 
is most wanted ; thus preserving the gener- 
al level of value between the whole ocean 


of currency and other values. In order, 
therefore, to ascertain the condition of our 
currency, or the currency of any people on 
the face of the earth, it must be tried by 
that standard. Bank-notes, paper-credits, 
and government-currency are not commodi- 
ties, and have no intrinsic value, and their 
marketable value must therefore be tried 
by the generally recognized standard of 

25. To prevent depreciation, paper mon- 
ey must be so regulated as to keep it in the 
same condition, in regard to amount and 
value, in which the medium of exchange 
would exist, were the circulation purely 

When specie payments were suspended 
by the Bank of England in 1797, the value 
of paper currency was maintained for sev- 
eral years, because the issues of paper were 
regulated with reference to the indication 
of exchanges or the price of gold. 


26. If there was perfect security for the 
issue of paper money in only such quanti- 
ties as would preserve its value relatively 
to the mass of currency and values through- 
out the world, it would never suffer depre- 
ciation, and would be of great advantage to 
the public. But no such security can be 
given ; the production of it is too easy and 
simple a process, and the temptation, when 
in want of money, too strong to restrain the 
issue. Hence the instability and unsatis- 
factory character of Paper Currency. 

27. The large issues of paper money by 
our government have enhanced prices, but 
have not produced any augmentation of 
value ; yet, because of the general rise in 
prices, a popular impression prevails of a 
large increase in wealth. The prevailing 
opinion seems to be that a general rise in 
prices is indicative of increasing wealth, 
whereas, nothing is more absurd. Price does 
not create value. Neither can legislative 


enactment. il Value/' says Mill, iC is a rela- 
tive term. The value of a thing means the 
quantity of other things which can be ob- 
tained in exchange for it," u By the price 
of a thing we understand its value in mon- 
ey; by the value or exchange value of a 
thing its general power which its possession 
gives in the purchase of other commodi- 
ties." "There may be a general rise in 
prices, but there cannot be a general rise in 

If there is a general rise in the money 
prices of all things, it cannot make the 
slightest difference as to the wealth of the 
community, because their exchangeable 
value, or relation to one another, must re- 
main precisely the same, although it may 
take more money to effect transfers. The 
great principle to be constantly borne in 
mind is, that the value of capital is the essen- 
tial thing, and constitutes the wealth of so- 
ciety. If half our currency was swept 


away, the nation would not be any the 
poorer. With our present large issues of 
paper currency, values circulate at high 
prices, but, as a general thing, one product 
will not exchange for more of another than 
it would on the old specie basis, which proves 
that real value remains the same, while the 
variation in prices is caused by an alteration 
or depreciation in the value of money. 
But, why call it a depreciation in the value 
of paper money, I may be asked. 

28. Because, paper money will not pur- 
chase as much of the commodities of life as 
the same amount of our former currency 
would do, which, after making all reasona- 
ble allowances for other operative causes, 
proves that money has lost its purchasing 
power, and become depreciated. If we 
take the two articles of consumption, sugar 
and coffee, we find, after deducting the ad- 
ditional duty, that the advance in price has 
been considerably over fifty per cent. It 


consequently takes $150 in paper currency 
to pay for the same amount of those pro- 
ducts procured by our old currency, or the 
currency of the world, for $100, while the 
value of suo^ar and coffee holds its same 
relative proportion to each article. With 
two pounds of sugar one could procure one 
pound of coffee, under our old specie cur- 
rency, as they now can under our paper cur- 
rency. Our currency, therefore, has been 
unduly increased and depreciated, while 
values have not been in the slightest degree 
affected. The paper price and imaginary 
value of one hundred barrels of flour is 
nine hundred dollars, but with specie at fifty 
per cent, premium its exchangeable value 
is only six hundred dollars ; therefore, one 
hundred barrels of flour will pay for only 
six hundred dollars worth of foreign produce 
which we consume, and for which our flour 
is exchanged. Hence, its real value consists 
in its exchangeable value of six hundred 


dollars, and not in its paper, fictitious, or 
imaginary value. 

29. There are only two ways by which 
a currency can be depreciated. If metallic, 
by a debased or degraded coin, or a redun- 
dancy of gold ; if paper, by loss of confi- 
dence, or over-issue. Gold, being a com- 
modity, has its value based as a general 
rule, like all other values, upon the cost of 
production, and when redundant in one 
country, its price, being fixed, remains unal- 
tered, while the prices of all other values 
have advanced ; therefore gold, being the 
most valuable at its price, is taken in prefer- 
ence to other values which bear a high price, 
for exportation. Paper, however, when is- 
sued in excess, having no intrinsic value, 
does not rise relatively with other articles, 
and, though the price remains unaltered, is 
not wanted for export. 

30. Hence, the excess of paper money in 
the United States never goes out of it ; but 


is kept in constant circulation ; it cannot be 
returned to the issuer for redemption, but 
must be pressed upon the market, and passed 
from hand to hand : and, as it is not desira- 
ble for its own sake, but only for what it 
will accomplish, every holder is desirous of 
employing it in the purchase of something 
of value. It acts, therefore, as an originat- 
ing cause of speculations, and the activity 
of circulation engendered has the direct 
tendency to enhance prices and foster ex- 

Says Tooke, "Additional currency, in 
whatever way it comes into circulation, 
must eventually raise the price of com- 
modities and labor." 

31. A certain amount of circulating me- 
dium is demanded, and no more ; when that 
amount is exceeded, its value is diminished, 
because it requires more of it to make ex- 
changes, and is not therefore worth as much 
as before. Money controls or commands 


capital, and the more or less capital a certain 
amount of money will control, demonstrates 
its value. If the amount of money is so 
profuse, by the introduction of a paper cur- 
rency, that it takes fifty per cent, more to 
buy with paper what one could buy with gold, 
the currency of the world, it seems to me 
the depreciation of the currency must be 
manifest. As an illustration of deprecia- 
tion, simple and to the point, let us take the 
case of any man who laid by one hundred 
dollars of our old currency ; could he not 
to-day, with that, buy one hundred and fifty 
dollars' worth of any commodities as valued 
by our present currency? Will any one say, 
then, that one hundred dollars of our present 
currency is worth as much in real value as one 
hundred dollars of our old currency ? No. 
Has it not then, depreciated ? Money hav- 
ing a legal and nominal price, which is inva- 
riable, any depreciation in its value must 
show itself in the enhanced prices of com- 



modities. In California, however, where 
gold is current at par, the depreciation is 
seen in the price of legal tender. 

" No government," says Say, " has the 
power of increasing the total value of mon- 
ey otherwise than nominally. The increased 
quantity of the whole reduces the value of 
every part." Says P. Webster, in relation 
to vain endeavors to increase the value of 
money by paper issues, " I have known 
people who had not milk enough to water 
it, but the nutritious particles of milk were 
not increased thereby. I have known chil- 
dren to change their pistareens to coppers 
to gain a greater heap of money ; in these 
cases the substance was wanting ; the show 
though increased was delusive." 

" Any further increase," says Mill, " of 
paper beyond the amount substituted for 
a metallic currency is but a form of rob- 

" A circulation can never be so abundant 


as to overflow," says Ricardo ; " for by di- 
minishing its value, in the same proportion, 
you will increase its quantity, and by in- 
creasing its value, diminish its quantity." 

32. While Secretary Chase, as I have 
just noticed in his report to Congress, en- 
tertains somewhat similar views, relative to 
depreciation caused by increase of the cir- 
culating medium, expressed in these words : 
"Such addition tends inevitably to deprecia- 
tion, and depreciation, if addition be contin- 
ued, will find its only practical limit in the 
utter worthlessness of the augmented mass," 
yet, he seems to question the representation 
that any " large measure " of the increase 
of prices is attributable to the existing 
amount of circulation. 

With all his attempted explanations, how- 
ever, he is very cautious in his statements 
as to what proportion of the present en- 
hanced prices is properly chargeable to our 
depreciated currency, and goes on to say. 


that " much the greater part of the rise 
of prices, not accounted for by other causes, 
as well as much the greater part of the 
difference between notes and gold, is attrib- 
utable to the large amount of bank-notes 
yet in circulation." And then, after giving 
the following excellent advice, viz : a all 
proper measures should be adopted to hasten 
the return to the normal condition of prices 
and business " — he urges the further estab- 
lishment of national banks. 

33. It seems to me our Hon. Secretary 
is in this matter very inconsistent. For, 
in the first place, he says addition to the 
currency tends to its utter worthlessness. 
2d. That bank circulation is the cause of 
the greater part of the depreciation between 
notes and gold. Then, after giving whole- 
some advice about returning to the normal 
condition of prices and business, he turns 
about and urges the further issue of bank 
circulation by the establishment of national 


banks. He is really an advocate, therefore, 
by other instrumentalities, of the same results 
which he deplores. Suppose, for instance, 
our State banks were converted into national 
banks, would their circulation be thereby 
decreased ? Not at all ; their bills, instead 
of being furnished by themselves, would be 
provided by the government, and their cir- 
culation would be increased rather than 
decreased, because their bills would have an 
additional currency, being current for all 
government dues excepting duties on im- 
ports, and for all government debts except 
interest on bonded debt ; and, with the cur- 
rency of their bills increased, their circulation 
could not fail to be augmented. But, not 
only does the Hon. Secretary wish State 
banks to adopt the new system, but he 
desires to establish other banks throughout 
the country, the effect of which would be to 
increase bank circulation and foster specula- 


tion, bringing about the very disastrous 
results which he deplores. 

34. Our present bank circulation, how- 
ever, is not, in my opinion, the cause of the 
difference between notes and gold. That 
assumption is entirely unsupported by any 
good or sufficient reason. Mr. Chase says, 
with great truth and accuracy of statement, 
" that the currency cannot be materially aug- 
mented without evil consequences of the 
worst character." In order, therefore, to 
ascertain from what quarter evil conse- 
quences have proceeded, we must ascertain 
from what source the increase of our curren- 
cy has been derived. According to our 
returns nearest Jan. 1, 1861, the bank circu- 
lation of the loyal States was $140,000,000, 
and nearest Jan. 1, 1863, $168,400,000, an 
increase of only about $30,000,000, which 
amount is at the present time decreased, and 
does not equal the amount of government 
legal tender notes, now withheld by the 


banks, as a basis for their own circula- 

35. Within the same time, the govern- 
ment has enlarged the volume of currency 
by adding over $400,000,000, which shows 
conclusively that the " material augmenta- 
tion of the currency," productive of these 
u evil consequences," has been derived from 
the government. 

36. But, because of the "evil conse- 
quences " arising from a depreciated curren- 
cy the Hon. Secretary seeks to throw upon 
the State banks the odium thereof, and says : 
« Were these bank-notes withdrawn from use, 
it is believed that much of the now very 
considerable difference between coin and 
United States notes would disappear." That 
is true, very true ; but would not the same 
principle apply with equal force to the con- 
traction in the issue of legal tender, to the 
same amount? Certainly. Of this there 
can be no question. The reduction of the 


currency to the amount of $200,000,000, 
whether by the withdrawal of bank notes or 
legal tender, must increase the value of the 
remaining currency, and cause " much of the 
difference between coin and notes to disap- 
pear." Its natural effect would be to cause 
a decline in the prices of all values, including 
gold, because gold is a value ; and the reason 
for the decline would be, because the amount 
of money being $200,000,000 — smaller than 
before, with the same values to circulate, 
those values must, in the very nature of 
things, be reduced in prices in order to be 
circulated by the remaining money ; and 
this decline in prices would demonstrate the 
increased value of money, because a certain 
amount of money would command more of 
commodities or values than before. 

This vital principle, namely, that by dimin- 
ishing the quantity of currency we increase 
its value, and by increasing the quantity we 
decrease its value, appears to be acknowl- 


edged and approved by Secretary Chase. 
Still, notwithstanding his assent to its posi- 
tive truth, he persists in advocating the 
establishment of national bank circulation, 
thereby increasing the quantity of currency 
and decreasing its value, which, according to 
his own reasoning and belief, must be pro- 
ductive of evil consequences. 

37. It is apparent that consistency, as 
well as the public welfare, requires the sup- 
pression of all bank circulation, both State 
and national. For, as Mr. Chase says, " it 
is believed, were State bank circulation with- 
drawn, much of the difference between notes 
and coin would disappear." Now the same 
principle applies with equal force to national 
bank as to State bank circulation ; conse- 
quently, if the suppression of State bank 
circulation would be productive of such 
happy effects, then certainly the public wel- 
fare demands the suppression of all other 
bank circulation, and the immediate discon- 


tinuance of all projects calculated to create 
it. One class of circulation should not be 
suppressed for the creation of another, as no 
advantage would be gained, and all good 
effects would be neutralized ; but both 
classes should be suppressed, and our banks, 
both State and national, become simply 
banks of deposit, and allowed to circulate 
nothing but the legal tender currency of the 

38. If we ever return to the " normal 
condition of prices and business," it must be 
through the reduction of the circulating 
medium, brought into just relations to the 
circulating value of the metallic currency of 
the world. This reduction can be accom- 
plished by two methods. One, the with- 
drawal or suppression of a portion of it ; the 
other, the introduction of it into the South- 
ern States, where it is now shut out. The 
entrance of a portion of it there, to circulate 
their values, would evidently reduce the 


amount circulating in the loyal States, and 
the same effect would be produced on prices 
in both cases. Hence, if we are successful 
in suppressing the Bebellion, and open the 
country to the circulation of our currency 
in the transfer of values, then the currency 
existing here, in the loyal States, will be 
reduced by precisely the amount required 
to circulate values in the Southern States, 
and prices of gold and other values will 
decline, in consequence of the reduction of 
the currency, compared with values circu- 
lated, until those prices are brought to their 
proper level, as measured by the reduced 
volume of paper currency. But those prices 
will not be brought to their i: normal condi- 
tion " unless the whole volume of currency 
shall stand reduced to its just proportions 
relative to all values, or, to the same amount 
as it would be, were the currency of the 
country gold and silver. And unless it be 
so reduced bv one of these two methods, its 


value must continue to be depreciated be- 
low that of our neighbors, or what is the 
same thing, redundant compared with the 
currency of other countries ; which depreci- 
ation is measured to a great extent by the 
price of gold. 

39. Speculations and loss of confidence 
in our finances do of course produce their 
effect upon the price of gold, causing more 
or less variation, sending it sometimes higher, 
then by reaction lower, than its relative 
paper value to all other commodities ; but 
as a general rule it marks by its average 
price the depreciation of paper. If paper 
is not depreciated to the amount of the av- 
erage premium on gold, why should gold 
move out of the country, at so high a price ? 

In the present currency our products bear 
an inflated paper or fictitious value \ and 
after the premium on gold is subtracted, 
they are of no more real or intrinsic worth 
than gold. Consequently, legal tender is 


depreciated to that extent. If our products 
were much cheaper than gold, after deduct- 
ing the premium on gold from their cur- 
rency prices, it is evident the exportation 
of gold would cease. 

40. That the prevailing high prices of all 
commodities is wholly attributable to depre- 
ciation, no one pretends to assert. For, the 
comparative state of demand and supply is 
known to be one of the prominent opera- 
tive causes in prices. This is seen es- 
pecially in the two leading articles of cot- 
ton and wool. The short supply of cotton 
has greatly enhanced its price, and the 
great demand for wool, in consequence of a 
short supply of cotton and other causes, has 
greatly increased the price of wool. Never- 
theless it is apparent that these articles, 
whatever may be their prices, are just so 
much higher in legal tender notes, as those 
notes are lower than our old specie cur- 


41. Supply and demand have their ef- 
fects on prices the world over, and if we are 
engaged in a war, and are large consumers 
of certain articles, those articles in foreign 
countries, unless their importation or ex- 
portation is restricted, feel the effect of it, 
and are affected in price, there as here, from 
the same causes ; but, over and above that 
cause and every other operating upon prices 
universally, there is one cause which creates 
a large difference in the prices of the same 
values, between those in our own and for- 
eign countries. For instance, two hundred 
pounds of cotton are worth in Boston one 
hundred and fifty dollars. In Liverpool, the 
same value, two hundred pounds of cotton, 
are worth one hundred dollars. Now, the 
same causes with one solitary exception, 
which have operated to carry cotton up in 
Boston to one hundred and fifty dollars, 
have carried it up in Liverpool to one hun- 
dred dollars, and that, the circulation in 


Boston of a large issue of legal tender 
notes ; hence, we may say with confidence 
that the difference in price of fifty per cent., 
must be caused by a depreciation of our 

And that depreciation manifests itself 
throughout the whole range of money 
prices, at about the same ratio, whether 
high or low. According to the Merchant's 
Magazine for November, there are fifty-five 
articles upon the Prices Current, which show 
a rise since 1861 of eighty-one per cent, ; 
in the same time, the rise of the principal 
railroad stocks has been one hundred and 
thirty-nine per cent, These enhanced pri- 
ces are partially owing to increased values, 
common throughout the commercial world, 
while the remainder is owing to the exist- 
ence of a depreciated currency. 

42. Some of the effects of enhanced 
prices are seen in the record of the Clear- 
ing Houses in New York and Boston. The 


Clearing House, it is understood, is where 
the total amount of payment to be made 
by each bank is set off against the total 
amount to be received by each from other 
banks, every day, and the balance only paid 
in money. These clearings, therefore, indi- 
cate the amount of money transfers of 
property made by bank deposits, from clay 
to clay, although they do not cover those 
made from account to account in the books 
of each bank. 

In New York City, the clearings per clay 
were, in 1857, $26,968,371 ; in 1858, $15,- 
393,735; in 1859, $20,867,333; in 1860, 
$23,477,737 ; in November, 1861, $19,590,- 
177; in November, 1863, $76,573,118. In 
Boston, November, 1861, $3,715,969; in 
November, 1863, $8,545,813. 

Here, it appears, taking the highest aver- 
age in the year 1857, when speculation was 
rampant, and the expansion of the curren- 
cy had inflated prices, and brought upon the 


country a monetary crisis, that the circula- 
tion of values, or the transfer of property, 
now takes three times the amount in our 
inconvertible paper currency which it then 
took in a convertible currency. 

To move commodities or values trans- 
ferred by high paper prices, bank deposits 
also are largely increased, as will be seen 

The deposits in New York City banks, in 
1859, were $76,665,092; in 1860, $79,716,- 
004 ; in 1861, $83,252,466; in 1862, $112,- 
195,094; in 1863, $138;195,914. Deposits 
in Boston banks, in 1861, $24,760,563 ; in 
1863, $32,371,254. 

It will be observed that the amount of 
clearings before the issue of legal tender 
notes was not so great in proportion to the 
amount of deposits as it now is, by one 
hundred per cent. ; which indicates that a 
lack of confidence in the circulating medium 
as a value, or a more than ordinary desire 



to turn whatever money is possessed into 
productive employment has greatly in- 
creased the circulation of deposits. 

43. Paper money freely issued has large- 
ly augmented the volume of circulating 
medium, and raised its level, here, there, 
and everywhere it circulates. The quantity 
having been increased, all commodities or 
values circulated by it bear their proportion 
as to price, by partaking of the u - augment- 
ed mass ; " then prices being enhanced, de- 
posits and clearings must be increased, and 
the whole superstructure of trade, business, 
and values adjusted to the new level of cur- 

44. The over-issue of paper money by 
the government has been a most expensive 
undertaking. Not that it costs anything in 
itself, for it is an easy and fascinating pro- 
cess, to pay debt, by creating debt. So easy, 
that it is said, a member of the Continental 
Congress once exclaimed in debate, " Do 


you think, gentlemen, that I will consent to 
load my constituents with taxes, when we 
can send to our printer and get a wagon- 
load of money." It is also reported of a 
patriotic old lady, that she considered it a 
shame tt that Congress should let the soldiers 
suffer, when it has power to make just as 
much money as it chooses." 

Yet, although so easy, it is a most expen- 
sive process ; it costs the government vastly 
more than they save in interest ; because, 
by being obliged to pay increased prices for 
all it consumes, its debt is increased with 
much greater rapidity than it otherwise 
would be. It virtually receives but seventy 
dollars in value for every one hundred dol- 
lars it agrees to pay. In other words, it 
agrees to pay in the currency of the world 
one hundred dollars for every seventy dol- 
lars it borrows ; because in that currency it 
could buy, for less than seventy dollars, the 
very same value for which it pays one hun- 
dred dollars in paper, or legal tender. 


Thus the national debt is largely in- 
creased without any additional value being 
obtained, which increases the taxes and 
throws the burden upon the people. 

The effect of the issue of paper money 
has been likened to insensible perspiration, 
which weakens the body, and wastes the 
constitution before the patient knows he is 
sick ; and it is said, a man possessing a great 
bundle of it is apt to be cheated, in spite 
of his convictions, into an opinion that he 
is richer than he is, and led into extrava- 
gant expenditures by the delusion. There 
is a great deal of truth in those statements ; 
and although our government may not feel 
its weakness, nor the people their burden, 
owing to its strong constitution, and the il- 
lusion of a paper currency, yet, unless 
there is a contraction, rather than an expan- 
sion of our currency, those results are in- 

The depreciated currency has not only 


increased the government debt and taxes 
upon the people, but it has been severely 
felt by the prudent, industrious, and eco- 
nomical portion of our people, especially by 
annuitants, and salaried men ; and their in- 
come in consequence of it, has been virtual- 
ly reduced one-third. While the better 
class of citizens have suffered, by the de- 
preciated currency, all money debtors have 
been enabled to pay their creditors in a 
sum of money really less than the fair 
claims. There are thousands of our citizens, 
however, who are really sufferers by the de- 
preciated currency, who are entirely igno- 
rant of it ; they look over their stock of 
goods, or other property, and cast up the 
amount, as estimated in paper prices, with 
evident satisfaction ; and, in consideration 
of large profits, spend their earnings and 
live extravagantly; but, when that clay 
comes, as come it must, and these enhanced 
paper prices vanish, as the bubble breaks, 


then they will have a glimpse of their real 
conclition ; and will conclude that all is 
not prosperous that appears prosperous. 

45. It is often asserted that no more pa- 
per has been issued than the wants of com- 
merce require, that it is all employed and 
there are calls for more. We have no doubt 
that at the present high prices of all values, 
the currency is all wanted ; but it is also 
certain that if more were issued, more would 
be required, as prices would advance pro- 
portionally. " The wants of customers," says 
Lord Overstone, " never check issues ; they 
are absolutely illimitable in the nature of 
things ; money is wanted by everybody to 
any amount." 

It is impossible to satisfy the craving for 
money, so long as there is in it the slightest 
power to purchase values. When the Con- 
tinental Congress "poured out their currency 
like water," says Mr. Felt, " they perceived 
with anguish that its nominal abundance 
diminished its real value, and left the vacuum 


of want unsuppliecl, whose sound continual- 
ly came to their ears, like a warning curfew, 
and whose cry increasingly was, Give, give." 
No, the desire for more money is no proof 
of the necessity for it, for that desire would 
continue, until it took $1000 (i to pay for a 
breakfast ; " and would increase as the value 
of money decreased. 

46. Any increase of the now greatly 
expanded volume of currency, whether by 
the issue of legal tender or by an addi- 
tional bank circulation, will only intensify 
the cry, which we now hear ascending from 
all quarters, — from mechanics, soldiers, 
clerks, and artisans, for a further increase of 
wages and salaries, the tendency of which 
will be, in the words of Secretary Chase, 
u an extravagant increase of disbursements 
and an aggravation of the evil." 

47. Instead of increase, the welfare and 
best interests of government and people 
demand a decrease. A contraction of the 
currency would result in saving the people 


from the burden of a large increase of debt 
and taxes, and reduce it to the "normal 
condition of prices and business." 

Mr. Chase suggests it in one sentence, 
but, alas, in the next, proposes again to 
augment it by the establishment of a na- 
tional bank currency. 

48. To accomplish so desirable an object, 
bank circulation, both State and National, 
should be suppressed, and a reduction of 
the issue of legal tender ensue, until the 
currency is brought to its normal condition, 
or at par with the precious metals. The 
currency of the country, so long as this war 
is in progress, should be confined exclu- 
sively to legal tender notes ; as the govern- 
ment is entitled and should possess whatever 
benefits may be derived from the supply of 
a circulating medium, but the volume of 
that currency should certainly be reduced 
to its proper level, which is at par with 

49. What the country is really suffer- 


ing for, is a currency which possesses a 
fixedness of value ; to attain that, it is es- 
sential that there should be a fixed, positive, 
and permanent amount of currency, — an 
amount which cannot be increased or tam- 
pered with by further issues of tender, 
interest-bearing notes, or national bank cir- 
culation, — an amount, whatever may be the 
sum total, which shall represent in itself a 
certain percentage of real value, thereby 
furnishing stability to prices. Then values, 
having assumed their relative proportions 
to the circulating medium, would no longer 

CD ? O 

be affected by it, but would circulate at 
steady though high prices, or only as they 
were moved by causes operating univer- 

50. Our government has assumed a 
fearful responsibility, in the increase of the 
circulating medium by the over-issue of 
paper ; it is a power that has always been 
abused, whenever and wherever exercised, 



generally resulting in disaster. When once 
the power is assumed, it being so easy to 
print paper, and impossible to create value 
by enactment, over-issue is inevitable ; 
money becomes depreciated, and values un- 
settled throughout the nation. 

51. To-day our Honorable Secretary of 
the Treasury, Mr. Chase, holds, to a great 
extent, this power of issue — which he has 
received from the government — in his own 
hands. He has within his grasp the scale 
of value, the graduation of which he can 
vary at pleasure. It is a vast, responsible, 
and momentous power, of too great propor- 
tions, and weighty with too many precious 
interests, to be intrusted to the guardian- 
ship of any fallible man. Such is his power, 
that, by the reten-tion and issue of currency, 
he can carry monetary prices up or down 
at will. He can impoverish or enrich, cre- 
ate or destroy, at pleasure. 

It is fortunate for the country, however, 


that our present Secretary is a man of so 
much sagacity and possesses such a high 
and honorable character. For it is by his 
prudence, foresight, and good judgment that 
we have been preserved from plunging still 
deeper into egregious folly. 

Whatever may be Mr. Chase's virtues, it 
is nevertheless one of the great evils of an 
inconvertible paper currency that it places 
in the hands of any one man such tremen- 
dous power ; for we know not who may suc- 
ceed him. 

52. We are now apparently prosperous ; 
our financial machinery is running smoothly ; 
the paper mills are at work and are making 
certificates of debt, which the people take 
for their products; our currency is one of 
debt, and that we are passing from hand to 
hand for values at high debt prices; we 
are, in fact, submerged in debt ; it is over, 
around, and about us, the debt of towns, 
cities, counties, and of the nation, but as 
it presses like the atmosphere with such 

f 72 

equality upon our system we feel not its 

53. Persons under water, having tons of 
it over their heads, feel not its weight ; and 
it is only when they come out", and attempt 
to raise a portion of it, that they become 
aware of its ponderous character. 

Thus it will be with our people when 
they attempt to extricate themselves from 
their present position ; they will then begin 
to realize for the first time their burdened 

We are apparently prosperous, but when 
we return to specie payments, these imagin- 
ary paper values which everywhere prevail 
will be destroyed, and the people will dis- 
cover that they were not really prosperous, 
but were much poorer than they had anti- 
cipated ; and they will then be convinced 
that wealth consists in the abundance of 
commodities money will procure, rather 
than in the amount of money that com- 
modities will command.