The gravest of all questions of political economy is that of a country’s
money. A very great deal more of the people’s common happiness depends
upon money than even political economists generally suppose. Happiness
is very closely allied to prosperity, and general prosperity in a
country can never obtain unless it is under a sound financial system.
Very few people understand what general prosperity means. It does not
mean vast sums of gold in the hands of a few of the inhabitants of the
country, while the great majority struggle month after month for the
absolute necessities of life. There may be a great deal of money in a
country and still be very little general prosperity with the common
people. The question of money has never been considered philosophically,
nor with due regard to the common interests of humanity. It is always
viewed from the standpoint of the wealthy, and usually by the wealthy or
by those in their direct interests.
The producing classes, however, are beginning to awake to the fact that
they have never been represented in any of the legislation that has been
had regarding finance and the currency they have been forced to use. On
the contrary, they perceive that all legislation has been in the
interests of capital, and this perception is what is arraying these
supposed two interests against each other. The facts existing have only
to be considered to prove that our financial system is unsound, and this
should be sufficient to force our legislation to take up the question,
and to handle it in the light of the demands of the present, utterly
regardless of the superstition that has so long existed about the gold
idol.
The objectors to any thing as money but gold, make much of the need of
it to make good the balances of trade between different countries. But
these forget that gold is nothing but merchandise until the country has
placed its indorsement upon it, and that it is this which gives it the
character of money, and that it does not derive this character from the
fact that it is gold. The indorsement of a country upon gold coin is a
simple guarantee that it is of a specific purity, after this, its value
is determined by its weight. Thus gold sent to other countries to pay
balances against us, is sent and received, as so much by weight of a
specific quality of gold, and not as so much of our national money. The
force of this objection, then, is utterly destroyed by these
considerations; and especially so, when this same gold, coined by our
government, is recoined by the country we send it to. Here it is
distinctly proved that gold is not money, and that it is only a
commodity which we produce and part with in exchange for other
commodities, and that it is just as valuable for this purpose if it goes
direct from the mines where we produce it, to other countries, as it is
if it goes by the way of a United States Mint, where it receives the
indorsement of the government.
To go still deeper, there is a no more mischievous idea than that all
paper money should be redeemable in gold which should alone be
legal-tender, because everybody knows that the amount of currency this
country demands cannot by any possibility ever be redeemed by gold. It
may be redeemed by using the same gold coin over and over again, as it
is again and again received and paid; but just here is the difficulty;
for ten dollars of currency in reality have to be redeemed by the one
gold dollar. This is the _practice_ of specie payments, and a most
mischievous one it is, too; it is the sole idea that leads to great
inflations, and consequently to great collapses in finances and values.
Under this system there never was nor never can be a reliable mercantile
value to anything. Fluctuation is its direct result, while speculation,
without this, would cease, and the vast horde of mere speculators who
spend their whole time in it, would of necessity be compelled to become
producers of some kind. It will thus be seen that the first principles
of economy are in direct opposition to the results coming from the use
of gold as money; and that these declare that something should supersede
its use as such that it would be impossible to speculate upon; something
that would have such absolute and never varying value as could be
positively counted upon to endure a month, a year, a century or a
thousand years, as the cases in question should respectively involve.
Such a substantial thing might with propriety be called money, and in
comparison to it gold would sink into utter insignificance and be
forgotten.
NEW YORK, September 14, 1870.