One of our Ohio martyred Presidents, James A. Garfield, in delivering
a speech in Congress, the last one, I believe, uttered this sentence:
“Whoever controls the volume of money in this country will be absolute
master of its industries and commerce.”
A truer sentence was never uttered in our House of Representatives. But
to see clearly and forcibly its truthfulness and effects, one must have a
proper idea of what money is, by what power it is created, the factors or
elements of money, and its functions and use.
Briefly stated, money is the debt-paying instrument in all civilized
nations, whose people are actively engaged in making contracts, buying
and selling. Every contract creates a debt, hence the necessity of a
debt-paying instrument.
Barbarous nations resort to barter; that is, giving one product or
commodity for another, and yet with all of our boasted civilization we
have men—some prominent ones too—who claim that money is a commodity.
I propose dealing in facts, as they are the stern sentinels of truth.
Every nation enacts laws compelling its citizens to tender certain
things, variously called “dollars,” “pounds,” “francs,” etc., as the only
legal means of payment of debts and taxes. This is the vital point of the
whole money question. Law, and law alone, makes money. Let us see what
money is, and how it comes into existence.
Our gold, silver, and paper coins; also our nickel and copper coins, are
really made up of three distinct factors or elements, each of which may,
and often does, exist independently of the other two. This fact is one of
the central truths concerning money.
What are these three constituents? First is the denominator or namer of
the unit—Dollar. This is an ideal or abstract term given to an intangible
thing. Second, some tangible or material substance to represent the
dollar, or some multiple of it; and third, its life, the _legal tender_
function.
No two of these can make money; they must all three be named by sovereign
power, Congress, or we have no money. Sovereignty is a unit and cannot
be divided, nor can it be delegated. This is why National Bank notes are
not a legal tender; they are simply the debt of the bank circulating as a
substitute for money, so as to gratify the greed of the money sharks, and
the “Power” that is aiming to be “master of our industries and commerce.”
But we are told that Congress, sovereign power, cannot make money out of
nothing, that there must be _intrinsic value_ in our monetary tokens. Let
us analyze this proposition in the light of facts and logical reasoning.
The second factor in money is the material substance used to represent
the dollar, or some multiple of it. This material substance does not make
the dollar. Remember this.
The important factor in the dollar is its _life_—the legal tender
function—and sovereign power alone can grant this.
Under our constitution, sovereign power is placed in the hands of
the American people—the whole people, not a part of them,—and their
representatives in Congress exercise that power; so that whatever
Congress says shall be money is money in the United States. So it can be
safely affirmed that law alone creates money. The fiat or decree of law
in the United States gives us our money.
But we are told that paper money, greenbacks, is all right when they
are made redeemable in coin. The word “redeem” should never be used in
connection with our money here in the American Republic. According to our
big dictionary, redeem means “to purchase back,” “to ransom, liberate, or
rescue from captivity or bondage.” Now as we have seen, Congress issues
our money and puts it in circulation among the people. Is not Uncle Sam’s
stamp on a piece of paper just as good as it is on a piece of silver or
gold? If not, why not? Will some one please tell us? Then again I ask,
wherein is there any sense or logic in Uncle Sam, the sovereign power in
the United States, buying himself back? Where has our sovereign power
got to, that Uncle Sam must ransom, or rescue himself from captivity or
bondage?
As we have seen, sovereign power alone can issue money. That being
a fact, Congress alone should issue all our money, whether coin or
paper, and it should all be made a full legal tender; and no one kind
“redeemable” in another kind; with no state or National note circulation
as a substitute for money.
Another very important consideration is that it should be issued in
sufficient volume to effect all our exchanges on a cash basis, or as
nearly so as possible; for debt and usury, now called interest, is the
present curse of every civilized country on earth.
This accomplished, the Government should establish Postal Savings Banks
in every city having a population of two thousand or more, where the
people could deposit their surplus money, until needed, in perfect
safety, paying a small per cent. just as they do for insuring their
buildings.
There is always a ratio existing between the total volume of money, free
to flow in the channels of trade, and all things on the market for sale,
including labor. This ratio is called—price. Statistics show that we had
our largest volume of money at the close of the Civil War. In 1866 we
had $80.00 per capita. We then had high prices and every man willing to
work was employed. There were no tramps on the road begging for work or
something to eat.
The accursed policy of contraction then commenced, at the instigation
of the “Power” that was aiming to “be master of our industries and
commerce.” Contracting the money volume continued until 1878, when we had
less than $20.00 per capita. Then our roads and city streets were full of
tramps, so-called. No work was to be obtained. Shops and factories were
closed and farmers did their own work.
In 1866 there were but 520 failures in the United States with liabilities
amounting to $8,579,000. In 1878, there were 10,478 failures with
liabilities amounting to $234,383,132. Such were the effects of
contracting the debt-paying instrument of our country at the dictation of
Wall Street money tyrants.
The Rothschilds in Europe are the “Power” that controls the volume of
money in every one of the European countries, and the result is they are
the “absolute masters of the industries and commerce” of every government
in Europe.
Furthermore, it can be safely said that through their agent, August
Belmont, and his clique in New York, they are aiming to become the
“absolute masters of our industries and commerce” here in the United
States.
Can it be possible that an American President would join in this crusade
against the best interests of the American people? It would really appear
so, for Theodore Roosevelt in his recent message to Congress recommends
retiring of the greenbacks and “redeeming” the silver dollars in gold.
That means that our gold coin shall be our only perfect money, with
National Bank notes (the debts of the banks, drawing double interest,
once on the bonds deposited to secure the notes, and again on the notes;
for no bank note passes over the counter of the bank issuing it, until
interest is paid in advance), as a substitute for money; thus giving the
banks the power to increase or diminish our volume of money, just as it
may suit their sweet will and avaricious purposes.
At this point of the discussion we are told that we must have a standard
of value, and that gold is a never-varying standard of value the world
over. In reply to that I find in Sir Frederick Eden’s table of English
money, from the Conquest in 1066 down to 1601, that in 1551 gold was
worth only 4 shillings 7½ pence per ounce in London—a little over one
dollar of our money; and in Doubleday’s “Financial History of England,”
page 277, that in 1813 gold was worth 5 pounds 10 shillings an ounce in
London—twenty-seven dollars and a half in our money. Does that look as
though gold was a never-varying standard of value?
Besides, there is and can be no such thing as a “standard of value.” We
can have a standard for quantity, gravity, and extension, but not of
value. We have the gallon, the bushel, the pound and ton, the yard, rod
and mile, but where is the unit for value?
Some may say; “Why the dollar is the unit of value”—not correct. The
dollar is the unit in the expression of price; and, as we have seen,
price is the ratio, so the word dollar is not a unit of value. Not until
we can measure an idea with a quart cup, measure it with a foot rule,
or put it in the scales and weigh it, can we have a measure of value;
for remember, value is an idea, an action of the mind, and what has
civilization invented to measure an idea with?
Value is human estimation of desirable things, which are limited in
quantity, or which require sacrifice to obtain.
There we have a full, clear and scientific definition of value, “Human
estimation”—clearly an action of the mind—an idea.
Whenever there is a general inability to pay debts on account of an
insufficient or low volume of money, we call it a—panic. We have had
five such periods in the history of the American Republic, viz: in 1819,
1837, 1857, 1873 and 1893.
How much better it would have been for our Republic had our fathers, who
framed our Constitution and established the Government under it, given us
a safe, sound and scientific financial system; with all money, whether
coin or paper, issued by the Government, and in sufficient volume to
do a cash business; volume to be increased as population and business
increased; all made a full legal tender for all debts public and private,
and at no time to be a contraction or reduction in its volume. Then we
would have had none of the periods called panics and our advancement in
all branches of business and science would be far in advance of what it
now is.
It may be said, and truthfully, that our fathers had no time to devote to
the money question; but there were a few in those days who did study it
and profited by it just as there are at the present time.
If the farmers, the mechanics and wage-workers,—the creators of
wealth—in this country ever expect to get any relief from the tyranny
and oppression of this octopus that is “aiming to be master of
their industries and commerce,” they must go to work earnestly and
systematically in their various organizations—the Grange, The Farmers’
Alliance, the Patrons of Husbandry and the various Labor Unions—to
studying the money question, and if they persevere they will see clearly
as President Garfield did over a quarter of a century ago, that “whoever
controls the volume of money in this country will be absolute master of
its industry and commerce.”
There were a few men even at the time our Government was organized who
understood the money question. Tom Paine, Thomas Jefferson and Benjamin
Franklin concurred in the theory that “good paper money, based on the
credit of the people is the best money ever invented by man.” “Equal and
exact justice to all men, special privilege to none,” was their motto.
Let me quote further from Garfield. In that same speech he said: “But
I admit freely that no Congress is wise enough to determine how much
money the country needs. There never was a body of men wise enough to do
that. The volume of currency needed depends upon laws that are higher
than Congress and higher than Government. The laws of trade alone can
determine its quantity.”
Demand for use is the natural law of money supply, and the Government
should furnish such an amount as may be legally demanded; the idea being
that the business of the country will absorb as much as it needs, and no
more.
My opinion is, the volume ought not to be less than $50.00 per capita;
and, as I believe, $100 per capita would be none too much to effect all
our exchanges for cash, which is the proper way to do a safe business.
According to the Treasurer’s Reports for 1864, 5 and 6, and Fawcett’s,
“Gold and Debt,” we had in circulation at the close of the Civil War
about $80 per capita, which was none too much. Then it was that we had
high prices and good times.
Our present Comptroller of the Currency reports $31 per capita in the
various kinds of money and substitutes for money now in circulation.
This is altogether too small an amount for the production and exchanges
required in this broad land of ours. The result is debts are being made
and credits are expanding at a fearful rate, preparing the way for our
next great panic.
As stated above, we have never yet passed beyond twenty years without
having a panic, and a moment’s thought will present to the mind the fact
that we are now on the last half of the twenty years since 1893.
It is coming, for we all know that “like causes always produce like
results;” and the cause is an inadequate volume of the debt-paying
instrument—money—to do the business with. The result is that deferred
payments—debts—must be made, and, as we have seen, a panic is a
prevailing inability to pay debts. So look out for breakers in the near
future.
Our present situation is no time to advocate commodity money, for the
defenders of hard money ought to know that hard money and hard times
always go hand in hand.
Demand for use is the natural law of money supply; and, as the demand
now is far in excess of the supply, it is safe to say, that unless more
money is put into the channels of trade, there will be a severe money
stringency; if not a genuine old-fashioned panic.
I have often wondered why $100,000,000 in gold is kept penned up in the
Treasury Building in Washington. So far as doing the people any good it
might as well be in the bottom of the ocean.
Money performs precisely the same function in the social organism that
blood does in the animal organism. Blood is the vitalizing force in
the human body, and money is the vitalizing force in the body politic.
Everybody knows that the loss of blood causes weakness in a human person,
and just so the loss of money—a contraction of the money volume—causes
weakness in a government; hence no “Power” should be permitted to control
our volume of money.
Every voter in this Republic has a head above his shoulders supposed
to contain a think-shop; and, if the “Power” now controlling our money
volume, and as a result our “commerce and industries,” is to be removed
and better times secured, every think-shop must get down to business,
with a full determination to see that our “commerce and industries” shall
not be interfered with, that the volume of money be increased enough to
effect rapid exchange of products and the payment of debts.
The difficulty in accomplishing this lies in the fact that so many
think-shops are never used, and again, some never read any newspaper
except “my party paper,” containing nothing for think-shops to work at,
and the result is—ignorance.
Thought is the mother of ideas, and ideas move the world. The reading man
will naturally be an observing man, a thinking man, always looking for
the cause of results which are transpiring around him, either in politics
or science.
The election in several States last fall indicated very clearly that more
men were using their think-shops than in previous campaigns. The good
work has commenced and may it continue until our Republic be free from
any organization that dare attempt to be—“Master of our industries and
commerce.”
_The Little Path to Peace_