The point has now been arrived at where it is to be considered as
decided that gold is not, cannot, be money; that it is a valuable
article of merchandise. Its utility beyond this character has not only
departed as a principle, but in practice a very considerable portion of
the most enlightened people in the world consider it the source of great
mischief, and the more the causes of the financial ills we are subjected
to are analyzed, the more they will be found to be dependent upon the
attaching of a specific value to something that is as changeable in cost
of production as it is possible for anything to be.
The philosopher and the best reformer would here step in and say that it
is their province not so much to tear down the old as it is to prepare
the new that shall take the place of the old. This is the science of all
reform. However, before there can be a field prepared in which the new
can be used, the defunct condition of the old must be pointed out, and
its _debris_ cleared away, so that the new may find space for operation.
This preparation has in reality been already made. The necessities of
the Government in the late war broke the first ground for the
consideration of this very important question, and prepared the minds of
the mass of the people, though, perhaps, unconsciously, for the
reception of the idea that it is possible to do without gold; that
specie payment is by no means a necessary accompaniment of a sound
financial condition, and that a money system which is made dependent
upon a redemption by something else, is not only not to be desired, but
that it is the real foundation for all financial disasters, because it
makes an undue expansion possible. The people who would once have
considered a proposition for an irredeemable currency with the utmost
alarm now discuss it as one of the things that is sure to be. It is
believed by those who have studied this subject deepest that the time
has arrived when this government must enter upon the consideration of a
permanent change in our financial system, and that a return to the gold
standard would be a disaster.
But, says the objector, how can an irredeemable currency ever be made to
adapt itself to the varied demands of the country? How can anything so
unsubstantial as a paper currency, without gold support, be made as
absolute a measure of values as the yard-stick is of distance? and, if
this can be accomplished, where will the elasticity of the currency be
found? In general terms it is assumed that, unless the proposed
financial system will answer all these conditions—that unless it will be
elastic, adapting itself to all the demands that can be made, be they
great or small, and at the same time remain absolute in its value, it is
not even fit to be thought of, much less to be seriously considered as a
substitute for what has been.
And this brings us back to the beginning of the argument—to the point
from which the first departure was made. The course that will be
pursued, however, after leaving this point this time will not be that of
reconnoitring—looking over—the ground to be covered, but a steady, firm
and final advance directly toward the objective result desired, which,
if a failure is made in reaching, the campaign against gold may be
considered a failure. Under the system of currency being good only when
it can be redeemed by gold, there is required, to make the currency
actually in circulation good, just as many gold dollars as there are
currency dollars—that is, if there is at any time in circulation any
more currency than there is gold to redeem it, then there is an
expansion, which any sudden change in any of the circumstances by which
nations are surrounded is liable to convert into a collapse. So long as
everything is prosperous, so long as nothing arises to shake the
confidence of the people, or to call the attention of any considerable
number to the possibility that there is not gold enough to redeem all
the currency that is in circulation, so long everything goes well; but
so soon as any one of said conditions occur or change, then there is a
rush to see who shall get what gold there is; the supply exhausted, the
unredeemed currency is valueless. This is the practice and the result of
a redeemable currency; the same results will also follow so long as such
a system is tolerated.
Everybody knows that there never has been a currency in circulation
sufficient in quantity to meet all the requirements of commerce that had
a complete basis in gold, and everybody also knows that there is not
gold enough in the world to meet this specific requirement. Hence it is
that institutions possessing, say $100,000 in gold, put forth and obtain
interest upon $500,000 in currency—that is to say, with a real capital
of $100,000, which is worth six per cent. interest, they really obtain
thirty per cent. interest, thus making it possible for them to double
their original capital every three or four years. Did those who now so
loudly complain of the National Banks receiving interest from the
government upon their bonds deposited, and from the people upon their
circulation, ever object to the greater enormities of the specie-paying
banks?
The only use of money is to facilitate exchanges of what the earth
produces, voluntarily or under compulsion. Money, then, has its direct
relation to these products as a whole, and can have no special relation
to any part of them; if made to enter upon and sustain any such special
relation, it is a purely arbitrary law, without foundation in principle,
that compels it, and all arbitrary laws belong to the ages past, when
brute force was required to guide ignorance; they cannot be long in this
age without generating irritation, and such irritation is now being
rapidly developed all over the world, wherever the laboring classes have
become at all advanced in knowledge. The few can no longer control the
many; the many are to control the few. Capital, through false systems of
values, has been able to control labor; but the time has nearly come
when the producing many will control the accumulated wealth of the world
for the benefit of the whole world—not simply and only because they are
the many, but because they are to be reinforced by the invincible powers
of demonstrated science, which are always to be found operating for the
“greatest good for the greatest number.”
NEW YORK, Sept. 27, 1870.