There are several propositions which should always remain in all
considerations about money, so that the mind may not be led from its
true sphere, and so that it may not be invested with peculiarities and
characteristics that never did nor never can belong to money:
_First_ and most important—most important because it is the determining
point which gives all that follows tangibility—is, that _money, in its
primary uses, is a means and not an end_. It is a means, because it was
invented to assist the people in performing something that could be
performed without, but not so well without it. And this is the _sole
use_ of money. Because this has been lost sight of and it has been
invested with other functions, it has been possible for it to be
converted to uses which at times, in culminating, have almost turned the
world topsy-turvy.
_Second._ Money is the medium of exchanging commodities, and when
diverted from its legitimate use and is made an end, results will ever
follow which _must_ be detrimental to the general interests involved.
_Third._ All the material value money possesses is so possessed because
of the relation it bears to commodities, that relation being
representative of or standing for.
_Fourth._ While money is the medium of exchanges, and while it is in use
representative of valuable materials, it is in its _last_ analysis the
_objective_ of that department of life of which labor is the
_subjective_, and, therefore, when scientifically viewed, it resolves
itself into a principal which is one of those upon which society must be
built when a perfect foundation is formulated.
In providing a currency, therefore, to meet the uses which are demanded
of it, its _scientific_ feature, as a principle, should be the point of
departure, and should be the only guide until it is attained. Labor
being the basis of production, is the positive power which reaches forth
and expends itself, where money, the other pole of the social battery,
is reached; this reaction upon labor completes the circuit, and here is
the process which is continually going on: A certain amount of labor—a
positive power—produces a certain amount of money or negative result The
interference with this natural process by extraneous means, through
which undue quantities of negative forces are accumulated, is that
process which robs labor of its natural and, therefore, just results.
The labor which the people of this country are capable of performing,
then, is the real basis upon which money should be formulated, and, as
in practice, the results generally are annual in their return, this
basis should be measured by all they can produce annually. It follows
that the basis upon which money should be uttered is this annual
capacity of labor, and there should be sufficient uttered to completely
measure this capacity, between which two, when once established, there
would be an equilibrium produced, which would only require to be
permanently regulated and maintained to insure a perfect harmony in the
material interests of society.
For example, let it be supposed that the extremest legitimate amount of
currency that would be warranted under the previous rule is one billion
of dollars; and that this amount is all that the uses of money require
when there is the largest amount of business being transacted. It must
be remembered that this is not a redeemable currency, but that it is
money; that it is the representative of the wealth of the nation, and
that the government, as the head of the nation, has uttered it, upon the
soundest and best basis of value any money could possibly have—the
productive capacity of the country. In this money system there could be
no such thing as the failure of banks to redeem their issues; nor of any
loss to be sustained by the individual because of the mismanagement of
any board of directors; and what is more than all the rest, in the
present systems of society, its value would be sustained by the
collective accumulated wealth of the whole country, and it could by no
possibility depreciate in value so long as the value of the country was
not exceeded by the amount of the issue.
To guard the people against all apprehension of such a result ever being
possible, there should be a measure placed upon this currency that will
at all times make it just as absolute in its measure of value as the
pound is in its measure of weight, or as inches are in their measure of
distances. Though this is comparatively a new proposition, and one that
but very few minds think a possibility, it nevertheless is just as
possible and just as essential—and more so—as all other absolute and
arbitrary standards are, that have been invented to give regularity and
stability in their respective spheres of use.
This currency—this money—should be made convertible into a United States
Bond, which should bear such a rate of interest—say four per cent.—as
experience has or should demonstrate to be the true point of balance;
and the bond should also be convertible into the currency at the option
of the holder. The rate of interest should be open to readjustment every
ten years, when the estimates for the currency are made. Thus it would
come that whenever there should be so much currency in circulation that
it would be worth less than four per cent. for business uses, the
surplus would immediately be converted into four per cent. bonds; and
whenever money for business should be worth more than four per cent.,
the bonds would be converted into the currency in just sufficient
quantities to meet the demand and to restore the equilibrium.
It will be readily seen how perfectly this meets all the requirements of
money, and how perfectly all the irregularities of demand and supply are
met by it. Thus, when business is dull, and but little money is
required, it (the surplus) will be in bonds drawing four per cent.
interest; the moment business revives, the bonds will be at once
converted, and the currency will meet the demand, and thus the constant
conversion of the one into the other will regulate and maintain the
equilibrium that all previous systems of money have so signally failed
to do.
In our next the advantages of such a system will be still further
considered and expounded, so that every one may be able to comprehend
that a money system is possible of invention, upon which foreign bankers
can not play their long-practiced games to any further one-sided
advantage.
NEW YORK, Oct. 11, 1870.