All movements for the increase of the monetary circulation are ascribed
by the money-lenders and creditor classes to the unworthy desire on the
part of the debtors to escape their just obligations. But if motives are
to be brought in question, the rule should work both ways. No note is
taken of the motive of the creditor classes in securing a contraction of
the circulation. Whatever the apparent purpose of contraction, and
however specious the arguments advanced in its justification, the real
object has always been to increase the purchasing power of money. In all
countries, and throughout all time, it is the cupidity of the creditor
classes and annuitants, and their desire to increase the value of the
money unit that has brought about a shrinkage in the money volume.
Unlike the great masses of the people, who were ignorant of the effects
to be naturally expected from such a shrinkage, the annuitants and
moneyed men very well understood that the value of every pound or dollar
depended on the number of pounds or dollars that were in circulation;
the larger the total number out, the smaller the purchasing power of
each; the smaller the total number out, the greater the purchasing power
of each.
Loaners of capital are not usually those who entertain further hope of
personal achievement. When men realize fortunes it is rarely that they
conserve the faculty of initiative; they find no special delight in
novelty; they look so carefully to security in the use of money that the
spirit of adventure is restrained. The realization of a fortune is
usually the labor of a life-time, and few men who reach the goal care to
retrace their steps to enter again upon a struggle that demands all the
strength, the momentum, and the intrepidity of youth. Men of assured
incomes therefore are disposed to take their ease, and society must
look, for its material progress and development, to those who have a
career to make, with the ambition and the power to make it.
It is a remarkable circumstance, Mr. President, that throughout the
entire range of economic discussion in gold-standard circles, it seems
to be taken for granted that a change in the value of the money unit is
a matter of no significance, and imports no mischief to society, so long
as the change is in one direction. Who has ever heard from an Eastern
journal any complaint against a contraction of our money volume; any
admonition that in a shrinking volume of money lurk evils of the utmost
magnitude? On the other hand we have been treated to lengthy homilies on
the evils of "inflation," whenever the slightest prospect presented
itself of a decrease in the value of money--not with the view of giving
the debtor an advantage over the lender of money, but of preventing the
unconscionable injustice of a further increasing value in the dollars
which the debtor contracted to pay. Loud and resounding protests have
been entered against the "dishonesty" of making payments in "depreciated
dollars." The debtors are characterized as dishonest for desiring to
keep money at a steady and unwavering value. If that object could be
secured, it would undoubtedly be to the interest of the debtor, and
could not possibly work any injustice to the creditor. It would simply
assure to both debtor and creditor the exact measure for which they
bargained. It would enable the debtor to pay his debt with exactly the
amount of sacrifice to which, on the making of the debt, he undertook to
submit, in order to pay it.