Any prospect of the outflow of gold is regarded as the opening of a
veritable Pandora's box, from which must issue forth all the evils that
can afflict mankind.
It is to this fear, no doubt conscientiously entertained, that we must
attribute the declaration of the President of the United States that we
do not dare to tread on the edge of so dangerous a peril. It is not
difficult to make the statement, but it will be very difficult to prove
that we stand on the edge of any peril whatever, if most or even all our
gold should go.
We heard this same apprehension expressed, and with equal, if not
greater, force twelve years ago, when the silver question was before
this body. We were then assured by the ablest of our so-called
"financiers" that the country would be denuded of its gold and that all
manner of dreadful catastrophies would result. The prospect was
represented to be appalling, although I do not remember that any reasons
were given to show how or why gold should leave the country, nor that
any statement was made as to exactly how this country would suffer if it
did leave.
For my own part, Mr. President, I regard it as a matter of very little
consequence whether gold goes out or not. Certainly if, in order to
retain gold, we must sacrifice justice, then I say let gold go.
It is not of so much consequence that we should retain gold for the
benefit of a small coterie of importers as that we should preserve the
equity of time contracts between the millions of our own people who
import no foreign goods. It is monstrous to think of violating all
equities in time transactions--and nine out of every ten of our domestic
business transactions are of that character--for the absurd and
inconsequent purpose of keeping in this country some particular
commodity, whether it be designated as money or otherwise.
The hoarding or the outflow of gold is a hardship when, under the law,
somebody is obliged to have it, as was the case during the war, when
gold alone would pay duties on imports. Combinations to hoard gold at
that time frequently involved great loss to the importer. But thanks to
the silver legislation of 1878 and other legislation making our Treasury
notes receivable for customs dues, no damage could now result from any
attempted corner in gold.
The creditors of this country never can convince the enterprising and
energetic people who form the debtor class that it is to our interest
that a certain material shall be kept in the country as money, if the
expense of keeping it is that the debtors shall continue to be despoiled
as they have been for the past fifteen years.
If we can only retain gold at the expense of steady and unwavering
prices, and at the expense of a steady and unchanging value in money,
then the quicker gold goes out the better. The constantly increasing
value of gold by reason of its increasing scarcity means the constantly
increasing burden of all debt, and involves the final absorption of all
the property of the country by the creditor classes. Under the operation
of the present system, by which prices are constantly falling and money
is constantly increasing in value, the surplus earnings of the people
are flowing in a steady stream into the vaults of money-lending
institutions, and into the pockets of creditors.
In a very intelligent article published in a late number of an
influential magazine--the Political Science Quarterly--there is the
significant statement, apparently derived from the best sources, that
in the year 1879-'80, one-half of all the mortgages in the State of
Indiana were foreclosed.
It were better for society that property should at once be confiscated
than that the great masses of the people in every community should have
to struggle through years of painful and exhausting effort in the face
of constantly falling prices and then in a large percentage of cases to
lose their property at last. But this can not be avoided so long as we
attempt to keep up what is called the gold standard. It is a necessary
consequence of the gold standard that we shall have the scale of prices
that obtains in gold standard countries If the presence of gold in this
country is to destroy our people, who doubts that it should go? If its
presence is to result in the destruction of equity and justice, who
doubts that it should go?
Nearly every witness who testified before the secret committee of the
House of Commons in 1857 agreed that gold could only be held by
paralysing the business of the country. It is estimated by witnesses who
testified before that committee, that in the panic of 1847, in Great
Britain, the property of the country, by reason of the measures rendered
necessary to maintain the single gold standard, was depreciated
$1,500,000,000. I commend that report to the careful and serious perusal
of the advocates of the single gold standard in this country.
Among the witnesses before the committee were John Stuart Mill, Lord
Overstone, and many other men distinguished in the world of letters and
finance. I am informed by the Librarian of Congress that there is but
one copy of the work in the United States. It would be well worth while
for Congress to order a number of copies of it printed, for there is no
work with which I am acquainted that contains so much practical
information as to the working of the single gold standard. According to
the testimony taken before that committee, the experience of Great
Britain since 1819 shows that gold alone, even when re-enforced by paper
money convertible exclusively into gold, instead of being a beneficent
instrument of valuation, has proved a cruel instrument of injustice.
A brief consideration of the causes which affect the movement of gold
will not be out of place in this connection.