Money was invented as a method to facilitate the exchanges of the
products of the industry of the world. If this is a true definition of
money, the only legitimate money it is possible to have is something
that naturally grows out of the uses it is required for. A national
currency, then, should be a representative of that which it is its
sphere to exchange; that is to say: a currency dollar should stand for a
certain amount of the different products, which have been produced at
the expense of a certain amount of labor. It will be perceived that this
representation is upon an entirely different hypothesis from that of a
currency which is supposed to represent gold.
To begin with something which everybody can understand: It may be
supposed that a farmer, occupying a given quantity of land, can, in a
series of ten years, produce an average amount of ten thousand dollars
per year to dispose of commercially. During the process of production he
is obliged to have, say, eight thousand dollars’ worth of means to
enable him to continue the process. Now, instead of his being obliged to
obtain credit based upon his prospective crop, he is supplied with a
representative currency based upon it; this enables him to purchase from
time to time that which he requires. When his crop is harvested, it is
disposed of, and his currency is _redeemed_ by it.
Now, make this application general to all kinds of production in the
country—which is the only basis of value a country can have—and make the
government the appraiser of the value thereof, and the maker and utterer
of its representative, and a currency will be obtained that will possess
all the requirements and characteristics of money; because it will be
used to exchange that upon which it is based and of which it is
representative, and which is substantially redeemed every time it
exchanges any products of the country.
Now, how shall this system be instituted? In the census now being taken,
the value of the total products of the country can be arrived at, which
sum total should be used as the basis of issue, and continue as such
during the next _ten years_, at the end of which time the increased
products would require another valuation to amend the bases for an
increased issue for the next ten years.
A currency thus obtained would possess all the substantial value that
could be required of money. It is really the basis of value when gold is
used; for how are a people to obtain gold unless they have produce to
exchange for it?—which operation is, in reality, nothing more than the
exchange of one commodity for another, of which it is not and cannot be
representative, while in the case of the proposed currency an exchange
is effected for that of which it is representative.
In this view of currency for a country, our system of greenbacks come
nearer being money than anything that has ever been in use in this or in
any other country. They were based upon the capacity of the country to
produce, and had the government confined itself to their use, and had
not been obliged to invent some further means to predicate securities,
we should now have had a real money currency. Who is there to find fault
with “greenbacks” as a national currency, provided there are enough of
them to transact the business of the country with, _and no more than
just enough_? But they lack one essential quality of real money—they are
not receivable for all things that people need money for, and which the
government demands of the people. They should have been made receivable
for all government demands, _even for duties on imports_. But the
necessities of the government, which was then struggling with all its
might for existence, made it a “military necessity” to exact gold for
duties on imports, as an indirect way of taxing the people who could
afford to indulge in the luxuries of foreign products.
Though not available for duties there never has been in the history of
the world so stable and invariable a measure of value as the greenbacks,
since government ceased issuing any more than the amount already out.
There has been no great financial panic and no considerable unsettling
of commercial values. They require that one thing more should be
done—they should be given a _fixed measure of value_. Then nothing more
could be required of a currency than would be found in the greenbacks.
The reason, and the only reason, why the people can feel that such a
currency may be unstable is the fear that the government may be induced
to issue it in greater amount than primarily authorized, and
consequently that it would depreciate; but this could not be until the
nation should issue more than the value of its property. But for this
deficiency there is a good and sufficient remedy, which can be provided
and used in connection with the proposed new currency, which is to be
based upon the capacity of the country for production, and which will
also provide for different seasons or parts of seasons when more or less
circulating medium is demanded to fulfill the business indications of
the country; and with this it is believed all the objections are covered
that can possibly be raised by the most strenuous stickler for a
currency with a gold basis, though the government may issue never so
great a volume of the currency proposed.
NEW YORK, Oct. 3, 1870.