The True American System of Finance.
The design of the Fathers of the Republic was to establish a government that would give to each citizen the highest political and religious freedom, and at the same time to secure to each the fruits of his own labor or talents.
It cannot be denied that labor is the wealth-producing power of the nation, and it is equally true that as a whole the laborers are poor. Some cause has been operating with continual and growing effect, to separate production from the producer. The wrong is evident, but neither legislators nor philanthropists have traced it to its true source; hence they have not been able to provide any sufficient plan for its removal.
The design in the following pages is to point out the true cause so plainly, that any ordinary mind may easily comprehend how it has produced and continued this unnatural oppression of labor; and to present a simple and effectual remedy for the removal of the evil.
No government, whether republican or not, that fails to secure the distribution of property according to the earnings of labor, and at the same time to strictly preserve the rights of property, can permanently insure the freedom and happiness of the people. The plan proposed is safe arid certain, and contemplates no agrarian or other distribution of property, nor any interference in contracts between capitalists and laborers. Its perfect adaptation to the genius of our free institutions — to the present and future wants of the government and business interests — with the simplicity and economy of its workings, and the justness of its bearings on all classes and interests, cannot fail to commend it to every disinterested intelligent mind.
The wants of civilized society cannot be supplied without a division of labor. One man cannot provide his own food, clothing and shelter, but is necessarily dependent on the labor of others for a supply of a part of his wants. A division of labor necessarily requires a system of credit; for all exchanges of property or values are credits for a longer or shorter time.
A system of credit creates a necessity for a legal medium to represent, measure and exchange values, and to facilitate the exchange of property and products.
Value consists in those properties that render any thing useful. The value of property is estimated by its usefulness, and not by the cost of its production.
For instance: one man, by good management, may build a mill at a cost of ten thousand dollars, that is capable of manufacturing two hundred barrels of flour daily; whilst another may by shiftless management, expend twenty thousand dollars in the construction of one that will make only one hundred barrels a day. The one costing ten thousand dollars being the most useful, is certainly the most valuable; and so with everything else that is produced by labor.
There are two kinds of value; actual value, and legal value. Actual or inherent value belongs to any thing that can be employed for any useful purpose without being exchanged for any other thing. Legal value belongs to any thing which represents or which can be exchanged for things of real value. Food, clothing, &c., are possessed of inherent value. The dollar or money which cannot be used for the supply of our wants or comforts without being exchanged for something of actual value, possesses only a legal value.
Money — Its Nature and Properties.
Money is the medium for the exchange of property and products, and the legal tender in the payment of all debts. To make it a public tender in the payment of debts, it must be instituted and its value established by national law. To effect a just exchange of property, it must be endowed with the following properties or powers, viz: power to represent value, power to measure value, power to exchange value, and power to accumulate value by interest. The absence of any one of these powers would destroy its usefulness as a medium of exchange. These properties or powers are inherent in no natural substance, and must be conferred on the material used for money by law. It is a radical error to suppose that the value of money depends upon the material of which it is made. It has no material, only an immaterial or legal value.
Power of Money to Represent Value.
Money is a legal representative of property; the real value is in the property, and money is only the legal medium by which the value is represented and exchanged. The representative is always distinct from the thing represented, and the presence of the representative implies the absence of the thing represented. The power to represent is always independent
5of the natural or inherent power of the representative and does not change the original capabilities or qualities of the agent. Delegated power gives the agent, person or thing, authority over other persons or things which, by his natural capabilities, he does not possess. For instance: one person cannot give a note, bond or deed, binding on another or the property of another; but he may be clothed with power to execute a note, bond or deed, binding on another or the property of another; but this delegated power does not lessen or change his capabilities as an individual. The sole use of money being to exchange property, to be fitted for this purpose it must be constituted a legal representative of actual value; for it has no inherent value that makes it an equivalent for products or labor.
Power of Money to Measure Value.
"Measures are definite quantities of length, weight, size and value. The pound-weight, yard-stick, and bushel, are measures of quantity, and the dollar or money is the measure of value.
In business transactions the length, weight, quantity and value of all articles, are settled by certain measures fixed upon by the Government. The length of the yard-stick, the size of the bushel, and the pound-weight, measures and determines a before undefined length, quantity and weight. The value of the dollar measures and determines a before undefined value of land, labor or products. When the yard-stick measures cloth, it does not determine its own length; and when money exchanges property, it does not determine its own value. Both the length of the yard-stick and the value of the money were previously determined by the laws which instituted them and gave them power to measure length and value, which are their sole object and uses as measures. The standard of weights and measures determines the weight and quantity of all commodities, and the dollar or money the standard of value, should by its own fixed legal value determine the amount of value of all other things. If the measures of quantity be variable, they will commit frauds when used; and if the value of the dollar be fluctuating, it will likewise commit frauds when used to measure the value of labor or property. Measures to be strictly just must equitably determine quantities and values, whether of land, labor, or commodities. The Government reserves the right to fix the length of the yard, the weight of the pound, the size of the bushel, and the value of the dollar, that they may be fitted for public use. Money is the public measure of value, and the Government is bound to make it just and uniform, that it may correctly determine the value of all commodities."
The Power of Money to Accumulate Value by Interest.
"With the power to represent and measure value, money must have the power to accumulate value by interest. This power is essential to its existence; for no one would exchange productive property for money, if it did not represent production.
The rate or amount of interest that the dollar commands determines its value, and makes it equal to a given amount of actual value or property; as much as the amount of service a horse can perform determines his value, or as the nett proceeds of a farm determines its value. The value of the horse and the farm are natural to them, and consists in their power to produce. The value of the money is artificial, and depends on its legal power to represent actual value and to accumulate by interest. A farm that produces a nett annual income of a thousand dollars, is more valuable than one that yields but five hundred dollars; so a dollar that can be loaned for twelve per cent. is more valuable than one that can be loaned for but six per cent.
The value of money as much depends upon its legal power to be loaned for an income, as the value of the farm and horse does upon their natural power to produce. Any increase or diminution of the power of money to accumulate by interest, increases or diminishes proportion ably its value; and consequently its power over labor and property. To keep the value of money uniform, the rate of interest must be kept uniform. Doubling the power of the dollar to accumulate, doubles the value of the dollar. It may still retain the name of dollar, but it will possess twice its former power over property and labor.
The same principle applies to all measures; the length of the yard-stick being doubled, although it might still retain its name, it would measure twice as much cloth as with its present limits. And money, while its denominations remain the same, measures more or less property according to the rate of interest. We may imagine a measure fluctuating, expanding and contracting between certain points; as a yard-stick made of some elastic material susceptible of being stretched to twice or thrice its ordinary limits, and still called a yard-stick and used as such; but no one would deem himself acquainted with the actual length of anything measured by this yard-stick; although if it were the legalized one it could and must be used.
Measures are instituted, and their length, bulk and weight are fixed by law, and not by individuals. The measure of value is instituted and made by law; and consequently it is fraudulently used when the rate of interest upon if which determines its value, is altered by individuals. The right to
7fix the value of money is as much reserved by the Government, as the right to fix the weight of the pound or the length of the yard; and the regulation of its value is a thousand times more important to the people. Although the value of money is now professedly fixed by the Government, we can form no correct idea of what its value will be at the end of three or six months hence. But we should think it ridiculous to ask what would be the length of the yard, or the weight of the pound, or the size of the bushel, three or six months hence. We should think farmers, manufacturers and merchants crazed if they should express great anxiety as to whether enough measures could probably be had to determine the weight and quantity of their products; and under a just and sound, monetary system, it would be equally absurd to ask whether enough money could he obtained to buy or exchange the goods; and it would appear as ridiculous to ask what the rate of interest would be at the end of three or six months, as to ask how many feet it would then take to make a yard. Money properly instituted would be as definite and uniform as the latter measure, and would no more govern the amount of production than the yard-stick does the quantity of cloth manufactured. It could be about as easily procured to facilitate all deservable production, trade and improvements, as yard-sticks to measure any quantity of cloth. The value of money is no more fixed or regulated by the laws ordering each piece of money to be coined of a certain weight and kind of metal, than the length of the yard would be fixed by ordering it to be made of a certain weight and kind of wood, without regard to its length."
The Power of Money to Exchange Value.
"Another power of money is to exchange property. When it is made a public representative of value, and the interest fixed at a just rate, it is fitted to perform the function of money, which, is the equitable exchange of property. All goods, wares and merchandize, although they may be exchanged for money a number of times, soon find a place where they are consumed; but money never reaches a point where it can be used except as a tender in exchange for property.
"The object of the institution of money is to facilitate the exchange of commodities, and this it could never do unless it were possessed of as much legal value as the thing for which it is to be exchanged possesses actual value. If a farmer has five hundred bushels of wheat with which he wished to buy sugar, coffee, tea, molasses, clothing and so-forth for his family, he will not sell the wheat for five hundred dollars unless the money will be a legal equivalent for all the articles for which he wishes to exchange his wheat. He does not want the money to keep; he wants it to exchange for other articles that he needs to use or consume, and he sells it for money because the money is a legal equivalent for every species of property. It would be very difficult for him to divide up the wheat and barter for the various articles in different places; and the wheat is not a legal tender. But he can divide up his money in amounts to suit all his purchases, and the money is a legal tender in payment.
"Instead of a medium of exchange, money is frequently called capital seeking investment. If money be capital it is already invested; because the capital would consist in the inherent value of the material of the money, and not in the thing the money seeks to obtain. But when money has found one investment, it is as much a seeker for a second and a third investment as if it had not been invested at all. It is always seeking investment without being investment." We are accustomed to say money is invested in property; but this is not true. Money is no more invested in property, than the yard-stick is invested in the cloth it measures. "Money is then a combination of legal powers expressed upon metal, paper, or some other substance. Its value is the standard or determiner of the value of all other things, and it serves as a public medium of exchange for land, labor, and all commodities."
The Material of Money a Legalized Agent.
The material of money — gold, silver, paper; or any other substance — is a legalized agent made to express the four properties or powers of money, and render them available in business transactions. Common usage has applied the term measure to the material, by means of which length, weight, etc., are ascertained. It matters not whether the yard-stick and pound weight be of wood, iron or gold; length and weight are the only properties necessary to be expressed by them, and possessing the standard limits their material is a matter of indifference. Of course some material is indispensible; but the only thing that makes one substance preferable to another, is its superior convenience. So of money; it is a matter of indifference by what material the powers are
9expressed, for the material is merely a substance fixed upon by law.
The natural powers of any material do not make it money. Its powers and agency as money are delegated to it by law, in addition to its natural capabilities. When gold is used, the powers conferred upon it make it an equivalent for every species of property. If gold had not been selected for the material of money, and a legal power given to it to exchange property and to accumulate interest for its use, a man would have as little need for more gold than he requires for utensils and ornaments as he has for more clothes than he can wear, or more tools than he can use. But when it is made the agent of these legal powers, it becomes necessary to acquire the gold in order to discharge debts; and the quantity of the metal being limited, its owners are enabled to extort from the necessitous a very high price for its use.
The common opinion that the material of a currency must be something scarce and difficult to procure, that the limited amount may render it permanently valuable, arises from a misconception of the nature of money, the properties of which are entirely independent of the material. The value of money depends upon its powers to represent, measure, accumulate and exchange value. These powers given to any convenient material by congressional enactment, will qualify it for a medium of exchange, and in every particular constitute it money.
The Rate of Interest the Governing Power in the Distribution to Capital and Labor.
There are but two purposes to which the yearly products of labor can be applied. One is the yearly rent or interest on the capital employed, and the other is the payment of labor. The rate of interests maintained on loans of money, determines what proportion of the earnings of labor shall be paid for the use of capital, and what proportion shall be paid to the laborers for their productions. If laborers pay to capital, as use or interest for the year, their whole surplus products, the laborers, as a body, work for a mere subsistance of food, clothing and shelter, and these in many instances of the poorest kind; while the capitalists live at their ease and revel in luxury. The rate of interest on money governs the rent or use of all property, and consequently the reward of labor. The centralization of the property of the nation into the large cities and the pockets of a few capitalists, is in proportion to the rate of interest maintained on loans of money above the average rate of increase in the national wealth.
The time in which money, loaned on interest and the interest collected and re-loaned annually, will double, is determined by the rate per cent. It may be proper to remark that this is the
10law governing interest. No man would take a note for one hundred dollars, bearing six per cent. per annum, interest and principal payable at the end of twenty years, as an equivalent for one for the same amount and time, hearing the same rate of interest, payable annually; for while the former would amount to but two hundred and twenty dollars, the latter would amount to three hundred and twenty dollars. When the interest is paid annually, the capitalist re-loans it, and is goes to gathering up more of the products of labor, taking them from the laborers and appropriating them to the capitalists.
Money loaned at ten per cent. will double in seven years three months and five days; at nine per cent., in eight years and fifteen days; at eight per cent., in nine years and two days; at seven per cent., in ten years, two months, and twenty six days; at six per cent., in eleven years, ten months, and twenty-one days; at five per cent., in fourteen years, two months, and thirteen days; at four per cent., in seventeen years and eight months; at three per cent., in twenty-three years, five months, and ten days; and at two per cent., in about thirty-five years.
To give an idea to what extent the power of interest operates, it is only necessary to say that all the money lent on bonds and mortgages by individuals, by insurance and trust companies — all lent for United States, State, County, City, Railroad, Canal, and other bonds, to make public improvements, whether these improvements be made by corporations, by the State or by individuals; also all the money lent by banks, brokers and individuals, on promissory, notes — all these loans are operating with a like centralizing power against the producers and distributors of the national wealth and in favor of the money lenders — money. This power also establishes a like rate per cent, rent to he paid for the use of all, property, real and personal. All the goods on hand in the nation and in process of being manufactured, are under tribute to this centralizing, power.
It is an unavoidable power, because it is instituted and enforced by the national laws, and is the basis upon which all market values are founded.
In order to determine what would be a just rate of interest on capital, we must ascertain the rate per cent. in the increase of the national wealth; and to approximate this the more closely, we must take the longest possible period of our history. Let us then take the period from 1790 to 1660 — seventy years. In 1790 our population was 3,929,827, and in 1869 it was a fraction over 31,000,000; but, for sake of convenience we will call the former 4,000,000, and the latter 32,000,000; being in 1860 eight times the number it was in 1790; The assessed value of the real and personal property of the nation as per
11census of 1860, was sixteen billions of dollars. I have not the means of ascertaining the value of the property of the country in 1790, but think it quite safe to assume that it was half as much per capital as it was in 1860, which would be $250 each. This for 4,000,000 would be $1,000,000,000, equal to an increase of sixteen fold in the value of the property, and of eight fold in the population, being a fraction over four per cent. in the increase of the property, and a fraction more than three per cent. in the increase of the population.
"The lowest rate of interest on money established by any State has been six per cent, and the rate has fluctuated between six and twelve per cent. during that period. If we take into the account the rates authorized on the bonds of corporations, States, &c., and the prices at which these bonds have been sold, and the exorbitant rates in many cases in business transactions, I think it will not be doubted that the average rate would be at least eight per cent. per annum. Property being then more equally distributed than it is now, we will suppose one-eighth of the population to have owned one-fourth of the value of the property, and to have loaned it on interest or rented their property at this rate, collecting and re-loaning the interest annually for the seventy years, the amount would he fifty-four billion, six hundred and thirty-nine million, three hundred and ten thousand, six hundred and forty-two dollars ($54,639,310,642); or over three times the amount of the value of the whole property of the nation as per census of 1860. This will account fully for the many monetary crisises we have had during that period, and for the rapid centralization of the property of the nation into the hands of the few capitalists who produce no part of the national wealth, and for the impoverishing of the wealth-producing classes. Money creates no wealth; it only gathers up and appropriates to its owner things already produced.
Let us see what the result would have been with the rate of interest on money and rents at three per cent. instead of eight percent. Two hundred and fifty millions at three percent. for seventy years, would amount to $1,980,000,000. One billion nine hundred and eighty millions of dollars, or less than one twenty-seventh part of the amount at eight per cent; while the former rate would amount to over three and one-fourth times the amount of the whole property of the nation. At the latter rate, the producers would have retained fourteen billions and twenty millions of dollars, or over seven-eighths of their whole production.
But it may be said, we have no means of ascertaining what would be a just rate of interest on capital. The earth is the origin, or source of all wealth, and labor is the means of developing these natural resources, and rendering them available for the wants and comforts of man. Labor is, therefore, the
12wealth-producing power of the nation. Agriculture furnishes the main part of our exports, and pays for all our domestic manufactures; it is, therefore, the leading interest, and the foundation of the national wealth. A renter cannot afford to pay over one-third of the nett proceeds, and keep up all the repairs, for a good and well improved farm. In 1790, the industrial classes owned 750,000,000 of the property, and the money lenders (or money,) 250,000,000. The producers were entitled to the whole increase on their own part, which would have amounted to $12,000,000,000, and to two-thirds of the increase on the money, which would have amounted to $2,666,666,666; total, fourteen billion, six hundred and sixty-six million, six hundred and sixty-six thousand, six hundred and sixty-six dollars, leaving to money one billion, three hundred and thirty-three millions, three hundred and thirty-three thousand, three hundred and thirty-three dollars, being only about two and one-third per cent., and showing that, where agriculture is made the basis, even three per cent. is too high a rate of interest on capital.
It may be said that the practical result will not sustain the argument. A sufficient answer to this objection is, that we have no means of knowing what would have been the present condition of the country, under the operation of a just monetary system, for the country would have steadily prospered, and we would have avoided the financial crisises which have so frequently prostrated all branches of productive industry. Besides, full one-half of the property of the nation is now owned by less than five per cent. of the population, and these belong mainly to the class who have not aided in its production, but have accumulated their wealth by means of our unjust monetary system. Let him who doubts this proposition, take any city or village, having a population of five thousand or upwards, and see if he cannot find, in a population of five thousand, fifty of the most wealthy individuals who own one-half of the permanent wealth of the place. Allowing five to the family, this would make two hundred and fifty, which is five per cent. on five thousand.
From this stand point lot us look forward twenty years. Although the increase in the national wealth for the past seventy years would seem to have been four per cent. per annum, it must be remembered that we acquired a large amount of valuable territory, and rendered productive a large quantity of our best and most valuable soil, during that period; besides, the basis upon which our future increase is to be made is sixteen times larger than it was in 1790, while our population is only eight times the number it was then. I do not therefore see anything to justify an estimate of over three per cent. increase in our national wealth in the future, and without a radical change in the principle of our monetary
13system I see nothing to indicate that the rate of interest on money will be lower in the future than it has been in the past; on the contrary, everything seems to point to even higher rates. Past accumulations seem but to have increased the avarice of the bankers and usurers.
The value of the national property, real and personal, in 1860, was $16,000,000,000; one-half of which belonged to capital, or money and the other half to the producers, or labor. Estimating the increase of the national wealth for twenty years at three per cent. per annum, the amount will be $28,897,776,000
|Capital's share, $8,000,000,000 at 8 per cent.,||37,287,656,000|
|Labor's share, $8,000,000,000 at 3 per cent.,||14,448,888,000|
This statement shows the absurdity of the power given to money — the medium of distribution to capital and labor. Under the operation of our present unjust monetary system, there is no hope of the producers or labors bettering their condition, for the same centralizing power will be continued, and we shall have a recurrence of the periodical crisises which have heretofore so frequently prostrated all productive and commercial enterprise, and robbed labor of its just reward.
Let us see the result with the rate of interest on capital at three per cent.
|Money's share, 8,000,000,000 at 3 per cent.,||$14,448,888,000|
|Labor's share, 8,000,000,000 at 3 per cent., the average increase in national wealth,||14,447,888,000|
Thus, with money at three per cent., the producers and distributors would have to give one-half of their entire productions to capital. If we take agriculture as the basis, the account would stand as follows, the producers owning one-half of the national property would be entitled to the whole increase on their own part, and to two-thirds of capital's share:
|Producer and distributor's share,||$8,000,000,000|
|Increase on same in twenty years,||6,448,888,000|
|Two-thirds of the increase on capital's share for twenty years,||4,299,248,667|
|Labor's share at the end of twenty years,||$18,748,136,667|
|Increase on same in twenty years,||6,448,888,000|
|Deduct the two-thirds due to labor,||4,299,248,667|
|Capital's share at the end of twenty years,||$10,149,639,333|
|Increase on capital in twenty years,||$2,149,639,333|
Thus it will be seen, that if we continue the bankers' and
14usurers' scheme, the few capitalists will absorb the whole national wealth in less than twenty years; while, if we adopt a just monetary system, taking agriculture as the basis of the nation's wealth, money's share will only be a fraction over one per cent. per annum.
While this may be too low a rate of interest on money, or capital, it is certainly much nearer the true rate than that demanded, by the capitalists. A candid and thorough investigation of this subject cannot fail to convince any disinterested intelligent mind that three per cent. is the highest rate the producers and distributors, as a whole, can afford to pay for the use of money or capital, and do justice to themselves and families.
The Constitution of the United States declares: "The Congress shall have power to coin money and regulate the value thereof, and of foreign coin, and to fix the standard of weights and measures." Congress has definitely fixed the length of the yard, the size of the bushel, and the weight of the pound, but they have not fixed the value of money. Money is the legal, standard of value. The rate of interest fixes the value of money. Its value is no more fixed by the quantity or quality of its material than the size of the bushel is fixed by the quantity and quality of its wood. It would be thought unwise and unjust if Congress should provide that the yardstick should be made of a rare and costly material, and to authorize a few merchants to regulate its length; and yet it would not be half so injurious to the public good as to empower a few bankers and usurers to regulate the value of money. In the former case, the merchant would be brought face to face with the purchaser, and the fraud would be seen, and the buyer would have the means of self-protection, while, in the latter case, the power operates silently and unseen, and the oppressor is seldom brought in contact with the injured party. The rapid centralization of the property of the nation into our large cities, and into the pockets of the strictly non-producers, is plain to every mind. The wealth-producing classes have sought to avert this evil, and better their condition, by almost every means but the true one. Labor-saving machines have been invented to increase production, and every possible means of improving the quality of the various productions of the soil and labor, have been introduced, and new avenues of transit have been multiplied to cheapen transportation, but all to little or no avail. These classes are still condemned to toil on in comparative poverty. The increase in productions, the improvement in quality, with the increased means of transportation, have but tended to augment the wealth of the few capitalists, and impoverish the industrial classes.
"With the present accumulative power of interest, there is
15no more chance of the laboring classes gaining their rights by combining their labor to increase production, than there would be hope of success in combining their labor to reverse the course of the rivers, and make them run to the tops of the mountains and pile up the waters on their summits. The law of gravitation, in the latter case, would not be more pure to overpower all their labor and frustrate all their plans, than the present governing power of the interest on money is sure to gather up the increased production and add it to the wealth of the capitalists. The fault is in the law which governs the distribution of property, and combinations to increase production would no more effect any general change in the distribution than combinations against the law of gravitation would effect a change in its general governing powers. The evil is legislative, and the remedy must be legislative."
We come now to consider the qualifications of the circulating medium which has been in use, as well as that proposed to be furnished by the system of National Banks, for the performance of the proper functions of money, and to show the insufficiency of both systems to meet the wants of the producing and commercial interests of the country, and then to present the True American System of Finance, and to point out its superiority over these systems.
However desirable a purely metalic currency may be in the estimation of some, there is no probability that it will ever be adopted by the American people. Since the establishment of our government, various attempts have been made for the accomplishment of this object, but they have always signally failed; nor is it by any means certain that success would have proved beneficial to the industrial interests.
All civilized nations have, to some extent, substituted a paper currency, in some form or other, indicating the universal opinion that it either was not convenient, or that there was not a sufficient amount of the so-called precious metals for a circulating medium. If this opinion be well founded, and I think it is, it would be unwise and impolitic to adopt an exclusive metalic currency. Money being indispensibly necessary to represent, measure and exchange values, it should only be limited by the amount of property and products to be exchanged, and should be subject to the control of the sovereign people; otherwise, a few capitalists can monopolize the whole circulating medium, or measure of value, by which they will be enabled to exact the most exhorbitant rates of interest from the wealth-producing classes, and encourage or prostrate every branch of productive industry at pleasure.
Money being a legalized agent for the just exchange of
16property and products, deriving its powers not from the quantity or quality of its material, but from the law instituting and making it a public tender, it would be, to say the least of it, doubtful economy to adopt a material requiring so much labor for its production, while one better suited and more convenient for all the purposes of money, can be had almost without cost. There is one argument frequently offered in favor of a specie currency to which I shall briefly reply. That is, that the so-called precious metals are legalized as money by all civilized nations, and that we cannot maintain commercial relations with them unless we legalize these metals as money. A sufficient answer to this argument is, that our coin is not current, at the standard fixed by our laws, in any foreign nation. They only receive it at their standard of value, and greatly prefer bullion. If we did not use these metals as a circulating medium, we would have more of them to ship abroad for the settlement of balances or to exchange for articles of real value. Besides, legitimate commerce is the exchange of the productions of the territiory and labor of one nation for those of another. All beyond mere barter is a matter of debt, and if we imported three hundred millions of dollars in excess of our exports, we would have to part with all our coin, which would derange the entire industrial interests of the nation.
The system of currency I propose contemplates no change whatever with regard to the use of these metals as a circulating medium. It only asks that the same legal powers be conferred on the treasury notes, issued by the government, that is given to these metals, and giving to the sovereign people the right to determine the amount of money necessary to transact the business of the country and the power and privilege of rejecting every kind of currency that is not a legal tender in payment of all public and private debts.
The System of Banking on no Securities.
A bank or paper currency, purporting to be redeemable in coin, has been mainly the circulating medium of our nation since its origin, the principal exception being the system adopted in a few of the States of banking on State Stocks. The charters of these banks authorized them to issue from two and a-half to three dollars for each dollar of coin they held, which was the only security the public had for the redemption of their notes. But they seldom regarded even this liberal restriction, but in many cases issued over ten dollars of paper for each dollar of coin they held. The necessity for money to conduct business operations, and the absence of anything better compelled the people to accept their notes in exchange for their property and products, which gave the bankers the
17control of the monied interest of the whole country, and they have yielded this power with an eye single to their own benefit. They have expanded and contracted the currency, raised and lowered the rate of interest, encouraged or prostrated all legitimate enterprise and productive industry, set the laws at defiance, and suspended and resumed specie payments at pleasure, and have, in every possible way, made the public interest subservient to their cupidity.
I will not attempt to give a detailed estimate of the losses this fraudulent system has inflicted on the people. They can only be counted by the thousands of millions of dollars. It has certainly cost the wealth-prodding classes more than all the wars the nation has ever been involved in, including the present gigantic rebellion. And if the rebellion shall be the means of ridding us of it, and establishing a true monetary system and a just financial policy, it will prove to be the greatest financial benefit ever conferred upon the industrial and enterprising classes of the nation.
When we reflect upon the losses and wrongs it has inflicted and the frauds it has perpetrated upon the producers and distributors of the national wealth, it seems strange that one honest intelligent advocate for its continuance can be found; yet there are a few who dread making a change, but their number is diminishing rapidly. The necessities of the government have been the means of enlightening the public mind on this subject. The short time that treasury notes have been in circulation has shown the people the value and advantages of a sound currency, and given them an opportunity to contrast the two systems, and the difference is so great that it is hardly possible they will ever consent to accept a bank currency issued under any system; if they consult their true interests, they certainly will not. It is to be devoutly hoped that the day is not distant when we shall have a currency strictly national, in which all shall be alike interested, and which shall be under the direct control of the sovereign people, and when the very name of a bank note shall become the synonym of deception and fraud.
Bankers' and Usurers' Scheme.
The banking law passed at the late session of Congress, provides for the establishment of a system of National Banks in all the States and Territories, the issues or circulating notes of which are to be secured by pledge of United States stocks bearing six per cent. interest, payable semi-annually in coin. The law is of great length, and exceedingly complicated. Its general provisions are, however, similar to the free banking law in several of the States, with the exception of the securities, which are to be United States stocks exclusively. My purpose
18not being to compare this system of banking with the system of banking on no securities, nor with any other banking system, but to show, by contrasting it with what seems to me to be the true American system of finance, that neither the wants or interests of the Government, nor of the producers and distributors of the national wealth, can be promoted, by this or any other system of banking. An extended review of the provisions of the law not being necessary to my present purpose, I shall only point out a few of what seems to me insuperable objections to this scheme, and then proceed to contrast it with the True American System of Finance.
SEC. 1 provides, That the chief officer of the Bureau of Currency shall be styled "the Comptroller of the Currency," and shall be under the general direction of the Secretary of the Treasury. He shall be appointed by the President, upon the nomination of the Secretary of the Treasury with the advice and consent of the Senate. Term of office, five years, unless sooner removed by the President and consent of the Senate; salary, five thousand dollars per annum. To have a deputy, who shall be appointed by the Secretary of the Treasury, with a salary of two thousand five hundred dollars; the Comptroller empowered to employ the necessary clerks to discharge such duties as he shall direct, which clerks shall be appointed and classified by the Secretary of the Treasury. The Comptroller and deputy shall take the oath of office prescribed by the constitution and laws of the United States and give bonds, the former, one hundred thousand dollars, and the latter fifty thousand dollars, with security approved by the Secretary of the Treasury
SEC 54, Authorizes the Secretary of the Treasury to employ any of such associations as depositories of the public money, except the receipts from customs.
SEC. 11 and 46 Confers on every association organized under this act, general banking powers, and authorizes the taking or receiving of such rates of interest as may be fixed by the laws of the States and Territories in which such banking association may be located and provides that such rates of interest may be taken in advance.
SEC. 16 and 41 provides, That every bank, organized under this act, upon depositing with the Secretary of the Treasury United States bonds, bearing six per cent., shall receive from the Comptroller circulating notes equal in amount to ninety per cent. of the current market value of the bonds deposited, but not to exceed the par value thereof; and that every association shall keep on hand, in lawful money of the United States, twenty-five per cent. of its outstanding notes of circulation for the redemption thereof: Provided, That clearing house certificates and balances due from other associations, in good standing, and subject to sight draft, may be counted as part of such reserve to the amount of three-fifths thereof.
SEC. 18 and 19 provides, That the Comptroller, under the direction of the Secretary of the Treasury, shall procure the dies and plates for printing the notes for circulation, and print and deliver the notes to the banking association, and all expenses incurred thereby shall be audited and paid as contingent expenses of the treasury department. And for the purpose reimbursing the same, and all other expenses incurred under this act, and in lieu of all taxes upon the circulation authorized by this act, or upon the bonds deposited for the security of the same, the associations organized under this act shall pay semi-annually to the Comptroller, in lawful money, (Treasury notes,) one-half of one per cent. on the amount of circulating notes received by such association.
SEC. 17 provides. That the entire circulation shall not exceed three hundred millions of dollars, one half of which is to be apportioned to the several States and Territories, according to their representative population, and the remainder is to be apportioned by the Secretary of the Treasury among the States and Territories, having due regard to the existing banking capital, resources and business of such States and Territories.
SEC. 26, 27 and 28 provides. That when any bank shall fail or refuse to redeem its circulating notes with lawful money, (legal tender, Treasury notes,) the Comptroller may declare the stocks pledged forfeited to the United States, or so much thereof as may be necessary to redeem its circulation, and pay its circulating notes out of the United States Treasury; or he may sell such stocks at public auction, in the city of New York; or he may, if in his opinion the interest of the United States would be promoted thereby, sell such stocks at private sale, and receive therefor either money or the notes of such failing association: Provided, no such bonds shall be sold at private sale for less than their par value, nor for less than their current market value at the time of sale.
SEC. 65 Reserves to Congress the right, at any time, to amend, alter or repeal this act.
Among the prominent objections to this scheme are the following:
1st. It confers on the Secretary of the Treasury of the United States unprecedented and dangerous powers. He has the appointment of every officer and clerk in the Currency Bureau, without the advice or consent of any other officer or department of the Government, and their term of office is made to depend on his will, with but one exception, that is, the Comptroller, and he is nominated by the Secretary, and subject to his direction and control. Thus, for the government of the Bureau of Currency, he is clothed with absolute power, without check or restraint from any other department of the Government. And indeed, so far as the interests of
20the Government and people are concerned, with but a few unimportant exceptions, these unrestricted powers prevail throughout the whole law. It might, at first sight, appear that the Comptroller had a limited authority to act independent of the Secretary, but a careful examination of the various provisions of the law will show that he is a mere machine to execute the will of the Secretary.
2nd. General and liberal banking powers are granted to these banks, to the extent of three hundred millions of dollars, with the use of the public money (except the receipts from customs,) for banking purposes, and their circulating notes furnished by the Government. And in consideration of these powers and privileges, and to reimburse the treasury for expenses incurred, and in lieu of all TAXES on their circulation and the bonds deposited for the security of the same, these banks are required to pay into the National Treasury only one-half of one per cent., semi-annually, on their circulating notes, which will be found to be less than one-third of the average amount of taxes paid on other property, exclusive of the expenditures by the Government in providing their circulating notes, maintaining the Currency Bureau and supervising the associations, which will probably absorb nearly the whole amount of the tax paid by these banks. Thus, instead of these banks paying a liberal bonus to the Government for the privileges and powers granted to them, as claimed by these bankers and their allies, the law virtually exhonorates them from taxation.
3rd. The currency furnished by these banks will not be a public tender, and therefore can in no fair sense be called money. Its value will not be uniform, for while the more solvent institutions in the commercial centres will be at par, those located at less accessible points will be looked upon with distrust, and brokers will drive about as thriving a business as they have done under the system of banking on no securities. When one of these banks fail, (which will depend very much on the action of the Comptroller or Secretary of the Treasury,) its circulation will become uncurrent, and it will take the Comptroller at least ninety days, on an average, to wind up the affairs of such failing association, and redeem its bills, and he may extend the time nine months, or even longer. In the mean time the brokers can purchase these notes from the necessitous at heavy discounts.
4th. One-half of the amount of the circulation of the banks is to be apportioned among the States and Territories, according to their representative population, and the other half is to be apportioned among the States and Territories by the Secretary of the Treasury, having due regard to the existing banking capital, resources and business of such States and Territories. The effect of this will be to give a few of the
21eastern cities and villages the controll of the currency of the nation, they having the major part of the existing banking capital. Indeed, the Wall Street gamblers will, as heretofore, have the controlling influence in the regulation of the currency of the whole country. These parties have already their agents in almost every village in the land, organizing these associations by getting a few of the business men in these towns to act as nominal directors; the Wall Street parties furnishing the securities. The local officers, in most cases, will be more, automatons to execute their will, and they will thus be enabled to control the entire circulating medium and trade of the country, independent of the Government and people. The premium on coin, and consequently the rate of interest on the Government securities and money, in all business transactions, will only be limited by their cupidity.
5th. Let us now see the advantages these banks are to derive from these privileges and powers, also the detrimental effects of the system on the Government and the producers and distributors of the national wealth.
They are to have the use of the public money, which, at a low estimate, I think will average at least sixty millions of dollars, as a permanent deposit, and which, for banking purposes, will be worth to them as much as five per cent. per annum. They are authorized to redeem their circulating notes and to pay the small pittance of tax levied on them, in lawful money; in a word, every payment they have to make to the Government and people is stipulated to be paid in lawful money, which means legal tender notes, while on the other hand, the interest on the Government bonds is payable half yearly in coin. To show the effects of this provision on the Government and wealth-producing classes, we have but to approximate as nearly as possible the amount of the national debt, and the time it will have to run.
It is quite safe to assume that our national debt will reach at least two billions of dollars by the first of January, 1865, and that it will not fall below this amount during the next fifty years. I think there can be no diversity of opinion on these points, when we consider that the ordinary current expenditures of the Government must greatly exceed the largest amount required at any period before the commencement of this rebellion, and when we add to this the interest on the national debt, and the debts incurred by the States, cities and counties to encourage enlistments, etc. It will certainly require all the taxes the people can bear to meet the current expenses, without paying any part of the principal in the time named. The interests of these banks, the usurers, the stock-gamblers, and the holders of the Government securities generally, will be promoted by maintaining the premium on coin at the highest possible point, and they will undoubtedly
22combine for the purpose of securing their mutual interests, and these banks will be the medium through which they will operate. They will become the agents for the collection of the interest on the Government bonds generally, and so long as coin commands a premium of five per cent. or upwards, it will not circulate as money, and the major part of it will soon find its way into their vaults. The highest estimate of the amount of coin in the nation has not exceeded three hundred millions of dollars. As much as fifty millions of dollars of this is hoarded in stockings, etc., and never enters into circulation at all, leaving, as the amount of coin in circulation, two hundred and fifty millions of dollars. The interest on the Government debt will be sixty millions of dollars every six months. At the end of eighteen months, or two years at farthest, these parties will have a complete monopoly of the coin of the nation, with power to compel the Government and people to accept whatever terms they may see proper to dictate. Under these circumstances it would be supreme folly to suppose that the premium on coin will fall below fifty per cent. — it is much more likely to go up to one hundred per cent. — but, at fifty per cent. premium, it will make the interest on the Government securities equal to nine per cent. per annum in the money of trade, which will be mainly the notes of these banks, unless it should be the interest-bearing legal tender treasury notes, four hundred millions of dollars of which the Secretary is authorized to issue, with discretionary power to fix the rate of interest, not exceeding six per cent., and the time not exceeding three years, and to make them a legal tender for their face. He has already issued fifty millions of dollars of these notes, making them a legal tender and fixing the rate of interest at five per cent., payable semi-annually, and negotiated, or rather, exchanged them with the New York, Boston and Philadelphia banks for legal tenders bearing no interest. Should the banks desire these notes for their reserve, they can secure such alteration in the law authorizing their issue as they may desire, for the same influences that passed this banking law will enable them to carry any measure they may insist upon.
Thus these banks will have the entire control of the currency of the whole nation, with power to expand and contract it at pleasure, to suit their own selfish views and ends, without regard to the interests of the Government and wealth-producing classes. Money being indispensible to production and commerce, this monopoly will not only enable them to regulate the rate of interest on the Government securities, but to dictate the rate in all business transactions, and I see nothing to prevent them from maintaining as high a rate on money in business transactions, as on the Government securities. Though these banks are only required to redeem their
23circulation in legal tender notes, they will not circulate their notes in their own localities, but will exchange them for the issues of other banks located at distant points, and thus evade redemption altogether, and where they keep the interest-bearing legal tenders as their reserve, the interest on them will be clear profit.
It will be the interest of the bankers and usurers to maintain the premium on coin as high as possible, for if they let it circulate with their currency they will only be able to realize six per cent. on the Government bonds, and to loan the interest they receive at the same rate; but by keeping the premium on coin at fifty per cent, the interest on the Government bonds will be equal to nine per cent. per annum in the money of trade, and they will be able to loan the interest they receive on the Government securites at the same rate. At the end of two years the account will stand thus:
|Interest on $2,000,000,000, 1st y'r at 9 per ct.,||$180,000,000|
|" 180,000,000, 1 y'r at 9 per ct.,||16,200,000|
|" 2,000,000,000, 2nd y'r at 9 per ct.,||180,000,000|
|On $2,000,000,000, 1st y'r, 6 pr c.,||$120,000,000|
|" 120,000.000, 1 y'r, 6 pr c.,||7,200,000|
|" 2,000,000,000, 2d y'r, 6 pr c.,||120,000,000|
|Net gain in two years,||$129,000,000|
|To accomplish this, suppose they should have to hold $250,000,000 of coin for two years, the interest on it would be||30,900,000|
|Net gain by keeping coin at 50 per cent.,||$98,100,090|
Let us see how the account will stand between the producers and distributors of the national wealth, or tax payers, and these bankers.
To put in circulation the three hundred millions of dollars of currency will require the deposit of three hundred and thirty-three millions, three hundred and thirty-three thousand, three hundred and thirty-three dollars of Government stocks; upon which these bankers will draw nine per cent. in the money of trade, (their own notes,) and a like rate on two hundred and twenty-five millions of dollars, being three-fourths of their circulating notes, one-fourth being held in lawful money as a reserve to redeem their circulation. Besides this, they will have the use of the Government deposits of sixty millions, worth to them at least five per cent. per annum. Out of this they have to pay only one per cent. per annum on the amount of their circulation, to reimburse the national treasury
24for printing their circulating notes, and all other expenses incurred under the law, and in lieu of all taxes on the bonds deposited and on their circulation. Recapitulation:
|Interest on $333,333,333 1/3 at 9 per cent.,||$30,000,000|
|" 225,000,000 at 9 per cent.,||20,250,000|
|" 60,000,000 Gov. depos., at 5 per ct.,||3,000,000|
|Less one per cent. tax on circulation||3,000,000|
|Net annual gain, clear of all taxes,||$50,250,000|
|Equal to fifteen per cent.|
To get the result when the banks use as their reserve the five per cent. legal tenders, we have only to add five per cent. on seventy-five millions of dollars (being the amount of their reserve,) to the net income as shown above.
|Net income as above,||$50,250,000|
|Five per cent. on $75,000,000,||3,750,000|
|Net annual profit,||$54,000,000|
Equal to 16 20-100 per cent. clear of all taxes, which is annual contribution laid upon the industrial classes for the sole benefit of these banks, and for the payment of which they receive no equivalent whatever. If this was the extent of the wrong — if it stopped here — it would be a light matter indeed, and might be cheerfully borne. But it is only a small installment on the amount that will be required to meet the demands of the bankers, usurers and stock gamblers, when they combine their powers to promote their mutual interests. Let us look at the result when this combination is formed; and to suppose that it will not be entered into, is to ignore all past experience.
The national wealth, as per census of 1860, was sixteen billions of dollars, one-half of which we have assumed was owned by five per cent. of the population who loaned their money on interest or rented their property to the industrial classes; and the rate per cent. on money determines the rent of all property. We have also assumed that the average annual increase of the national wealth was equal to three per cent., and estimated the rate of interest at nine per cent. per annum. Taking this then as the basis of the calculation, the account between the wealth-producing classes, or tax payers, and the bankers and usurers, or tax-consumers, will stand as follows,
|Money's share, $8,000,000,000, at 9 per cent.,||$720,000,000|
|National wealth, $16,000,000,000, at 3 per cent.,||480,000,000|
|Excess paid capital over increase of nat'l wealth,||$240,000,000|
With the average rate of interest on money at seven per cent the result will be as follows: Seven per cent on eight billions of dollars is five hundred and sixty millions of dollars, while the whole increase on the national wealth will be but four hundred and eighty millions of dollars, showing money's share to be eighty millions in excess of the entire increase of the national wealth. And even at six per cent., money will gather up and appropriate to its owners all the surplus products of labor, and compel the laborers, as a whole, to toil for a mere subsistence of food, clothing and shelter, while justice requires that the laborers should retain the larger portion of their products.
6th. It is founded on the fudal or aristocratic idea of money, taking from the many the products of their labor and talents, and giving them to the few bankers and usurers without compensation, thereby practically defeating one of the main designs of the founders of the Republic — which was to establish a government, that would give to each citizen the highest political and religious liberty, and secure to each the products of his own labor and talents — and reducing the laborers to a state of vassalage or slavery; for any system which enables one class of men to appropriate the fruits of the labor and talents of another class to their own use, without compensation, is practical slavery, no matter by what name it is called. For when you deprive a man of his right to the enjoyment of the fruits of his labor and talents, there is no other right which he can long maintain. The continual and pressing wants of his physical nature will sooner or later reduce him to abject slavery; and what is true of the individual is true of the nation.
7th. While it will not and cannot furnish the people with as good a currency as legal tender treasury notes, it will compel the Government to purchase coin from the bankers and usurers at exhorbitant premiums, or to borrow it abroad at extravagant rates of interest, to pay the interest on the national debt. For the payment of this the soldiers and wealth-producing classes will have to be burdended with taxes, while they never received or asked for anything better than Greenbacks, and to-day they infinitely prefer them to the guilded frauds of any shoddy banking system. The people are asking for bread, and the Government, at the dictation of the bankers and usurers, are determined that they shall receive a stone.
Under this system, the bankers and their allies can so increase the premium on coin as to prohibit the importation of all foreign manufactures, and to regulate the prices of all agricultural products. If the direct object of the law had been to subject the agricultural interest of the nation to the control of the bankers and usurers, I cannot see how it could have been more effectually accomplished than it is by the law as it
26stands. And with the agricultural interest, which is the foundation of the national wealth, under their control, they will soon find the means to regulate the price of labor in our manufactories and all other branches of industry to suit their own selfish purposes. I feel warranted in saying, in behalf of the agriculturists, (of the great North-West at least,) that with very few exceptions they favor a protective tariff, so far as the same may be necessary for the protection of LABOR in the development of the national resources; but they are with equal unanimity hostile to a tariff for the protection of a few bankers and usurers and overgrown monopolies which are opposed alike to the interests of labor, whether employed in agriculture, mining or manufacturing, and they will cheerfully join with the laborers in every department of industry for the purpose of checking the aggressions of the bankers and usurers on the rights of labor. The only practicable way of accomplishing this most desirable object is, by taking from the Shylocks the control of the currency, establishing a true monetary system, and instituting money on the principle of justice and common sense, and reducing the interest on capital to a just rate. This is perfectly feasible, for the wealth-producing classes have the power to do it whenever, they put forth a united effort, for in numbers they are as twenty to one.
9th. The sixty-fifth section reserves to Congress the right to alter, amend or repeal the law. The interest of the Government and people demands its immediate repeal, and the issuing of legal tender Treasury notes as the entire currency of the nation. Congress should act at once in the matter, for if they do not, the Shylocks will be claiming vested rights under the law, or they will steal through Congress in some omnibus bill, a law repealing this section. If Congress fails to act in the matter, it is the duty of the people to repeal both them and the law by filling their places with men who will recognize their rights, and who will act justly; and by refusing to accept one dollar of the gilded frauds, and insist upon GREENBACKS, which they have a right to demand for services and supplies rendered the Government.
The bankers and usurers (the real authors of this system,) know that it is a fraud upon the rights of the people, and, if properly understood by them, can never be carried into effect. Their only hope of success is by deceiving the people. For this purpose they propose to have written on the face of the circulating notes, in letters of gold, "National Currency," while the truth is, they have no more claim to this title than the bills of any State bank secured by United States Stocks. If they will place the truth, on the face of their bills, it will be written in letters of blood, — THE PRICE OF AMERICAN LIBERTY; for a thorough investigation of this system cannot fail to convince any disinterested, mind that the results of its
27practical workings will be to build marble palaces for the bankers and usurers, to clothe them in purple and fine linen, and enable them to fare sumptuously in every way, while it will provide hovels for the wealth-producing classes, clothe them in rags, and condemn them to a life of privation and unremunerated toil.
The True American System of Finance.
The issue of Treasury Notes, without interest, made a legal tender for the payment of all public and private debts, in denominations to meet all the wants of the business interests, and convertible, at the option of the holder, into Government Stocks bearing three per cent. interest per annum, payable annually in, lawful money of the United States. These stocks to be made re-convertible into legal tender Treasury Notes, at the option of the holder, at any time after one year from the date of the issue of said stocks.
There can be no difficulty in introducing this system, if we admit the capacity of the people for self-government.
Let Congress authorize the issue of legal tender Treasury notes, on the plan herein, proposed, to the extent required for circulation, and likewise authorize the issue of three per cent. stocks, on the plan herein indicated, to any amount that may be necessary to meet the demands on the Treasury; also, to authorize the Treasury Department, in the discharge of the obligations of the Government, to pay out legal tender Treasury notes, or three per cent. stocks, at the election of the Government creditors.
Among the advantages claimed for this system, are the following:
1st. It is adapted to the genius of our free institutions. By giving the soldiers who are defending, and the producers and distributors of the national wealth, who are furnishing the supplies to the Government, the right to choose between legal tender Treasury notes (legal money,) and interest-bearing bonds, in payment for services and supplies, the finances of the nation are brought under the direct control of the sovereign people, where it rightfully and necessarily belongs. For no government can be permanently maintained when the military power and national finances are not subject to the sovereignty of the nation. Under its operations the people will have the power to determine the amount of currency necessary to transact the business of the country, and in a great measure to regulate the interest on capital. So long as money can be employed in legitimate business to yield a greater income than three per cent. per annum, Treasury notes will be more acceptable than Government bonds; when this cannot be done, the Government bonds will be preferred. If at any
28time the rate of interest on capital should rise much above three per cent., the bonds, being convertible into legal tender notes, the holders would of course make the exchange, which would, in effect, prevent the rate of interest from rising much above three per cent, in legitimate business transactions; and the currency or money of the nation being under the control of the producers and distributors of the national wealth, they will be enabled to prevent all violent expansions or contractions in its volume, and labor will be more justly rewarded, every branch of productive industry quickened, and permanent national and individual prosperity secured, without which we cannot develope our great natural resources and become self-sustaining and independent as a nation.
2nd. It will furnish a currency of uniform value throughout the whole nation, and being endowed by Congressional enactment with power to legally represent value, power to legally measure value and power to legally exchange value, will, with the power vested in the whole people to regulate the rate of interest, constitute it a just medium of distribution to capital and labor, and fit it in every way for the performance of all the functions of money. It will be purely national in its character; each individual will have a like interest in it, in proportion to the amount of his productions and business, and it will be more acceptable to the loyal wealth-producing classes than that furnished by any banking system the ingenuity of man can devise.
3rd. The economy of this system will enable the Government to do justice to the soldiers who are periling their lives in its defense, by properly compensating them for their arduous services, and to the widows and orphans of those who may fall in battle, by making suitable provisions for their future wants and comforts. Also to benefit the producers and distributors, who are furnishing the Government with all needful supplies, by liberally remunerating them for the products of their labor, and at the same time greatly diminishing the burdens of taxation on these classes. And it should be remembered that these are the real capitalists to whom the Government must look for support and supplies, and who will in the end have to bear mainly the burdens of future taxation, for the laws authorizing the national loans and establishing the system of national banks virtually exempts the bankers and usurers from the payment of taxes.
4th The Constitution of the United States expressly delegates to Congress power to coin money and regulate the value thereof, to fix the standard of weights and measures, and to regulate foreign and domestic commerce. Under these grants Congress has an undoubted right to exercise any or all of these powers, but it does not seem clear to the common mind that any authority is given to that body to delegate these
29powers, or any of them, to any class of individuals or corporations. The States, or people, granted these powers to Congress for the public good, and not for the benefit of any privileged class of individuals or corporations. If the public interest could not be secured by the exercise of these powers by the States, it is difficult to see how it is to be promoted when they are exercised by a class of private corporations. Again if Congress may rightfully delegate any one of these powers, then they may delegate all of them, and any others that are granted to that body by the Constitution. With the power to make, control and regulate the value of money, necessarily comes the power to regulate commerce. These are among the most important powers granted to Congress.
5th. Important as this system will be to the nation financially, it will prove infinitely more so in a political point of view. It will restore commercial relations between all parts of the Union, and interest every citizen pecuniarily in the preservation and perpetuity of the Government, thus making us a homogeneous nation. Man, in the very nature of his being, is so constituted that his wants and dependencies bind him to his fellow man. This commercial tie is therefore the strongest bond of union that can exist between the different portions of our extended domain.
6th. It is founded on the true democratic idea of money. It is emphatically the people's plan, requiring no aid from the bankers (mis-called capitalists,) to put it into operation. The simplicity of its workings, the justness of its bearings on all classes and interests, with its perfect adaptation to the genius of our free institutions, and the present and future wants of the Government and business interests of the nation, cannot fail to commend it to every intelligent disinterested mind. Congress may, without exercising any doubtful power, adopt such a financial policy, and provide such a circulating medium for the people, and it is imperative on them to do so.
The Government should rule over money instead of allowing money to rule over the Government. To do this, it must furnish a supply adequate to the wants of production and commerce, and regulate a just rate per cent. interest. This, we claim, the adoption of the True American System of Finance, or People's Plan, here presented, will do.
Let us now compare the results of the workings of the two systems.
We have assumed the national debt will be two billions of dollars by the first of January, 1866, and that the principal would not be reduced below this amount within the next fifty years. For the purpose of comparison, we will now assume that, under the True American System of Finance, as much as six hundred millions of dollars of Treasury notes will circulate as currency, and bear no interest. Certainly no one
30will claim that this is too high an estimate, when all bank notes are driven out of circulation, which will be done as soon as enough notes are issued to meet the wants of the business interests, for all prefer Greenbacks to bank notes. This will leave one billion four hundred millions of dollars of the national debt bearing an interest of three per cent. per annum. Under the bankers' and usurers' scheme, the whole amount of the debt will draw interest, at nine per cent., in the money of trade, for if their scheme is permanently established, they will be enabled to monopolize the currency and maintain the premium on coin sufficiently high to make the interest on the Government securities equal to mine per cent. at least.
|By bankers' scheme, $2,000,000,000 at 9 per ct.,||$180,000,000|
|"True Am. Sys., $1,400,000,000, at 3 per ct.,||42,000,000|
|Net annual saving to tax payers,||$138,000,000|
|Result with the interest reckoned at seven per cent:|
|By bankers' scheme, $2,000,000,000 at 7 per ct.,||$140,000,000|
|"True Am. Sys., $1,400,000,000 at 3 per ct.,||42,000,000|
|Annual bonus to bankers and usurers,||$98,000,000|
Thus it will be seen that, with interest computed at nine per cent., the banker's and usurers' scheme will cost the wealth-producing classes or tax payers, annually, over four times the amount required by the True American System, or People's Plan, and nearly three and a-half times as much with interest reckoned at seven per cent. The result, at the end of fifty years, will be as follows:
|$2,000,000,000 at 9 per cent.,||$148,851,000,000|
|1,400,000,000 at 3 per cent.,||$6,163,834,830|
|Add to redeem Treas'y notes at the end of that time,||600,000,000||$6,763,834,830|
|Bonus to bankers and usurers,||$142,087,165,170|
The cost to the wealth-producing classes by the True American system of Finance will be less than one-twenty-second part of the amount required by the bankers' scheme. Taking the national wealth at sixteen billion of dollars, and estimating the increase at three per cent. per annum, at the end of fifty years the amount will be $70,215,255,200, or less than half the amount of the accumulation on the national debt at nine per cent.
We will present it in the most favorable light that even the bankers and their allies can claim, by taking the average rate of interest at seven per cent. They will draw fifteen percent, on $333,333,333 used for banking purposes, equal to fifty millions of dollars annually, and six per cent. on the remainder
31of the two billion of dollars, $l,666,666,666 2/3, equal to one hundred million of dollars; total annual interest, $150,000,000, equal to 7Ë per cent. on two billion dollars. But we will calculate it at seven per cent.:
|Two billion dollars at 7 per ct. for fifty years,||$59,013,051,268|
|Amount by True Amer. Sys., including the redemption of the Treasury notes,||6,763,834,839|
|Net gain to the tax payers,||$52,249,216,438|
The cost by the True American system will be only a fraction over one-ninth of that by the bankers' scheme.
Let us take a more extended view, and look at the effects of the two systems on the wealth-producing classes as a whole. The amount of the national wealth, as per census of 1860, was sixteen billions of dollars. We have assumed that one-half of this was owned by five per cent. of the population and that they loaned it on interest or rented their property to the wealth-producing classes at the same rate of interest paid on the Government securities, thus:
|Eight billion dollars at nine per cent.,||$720,000,000|
|Eight billion dollars at three per cent.,||240,000,000|
|Bonus to money by bankers's scheme over the True American System,||$480,000,000|
|Equal to the entire increase in the national wealth.
With interest calculated at seven per cent, the result will be as follows:
|Eight billion dollars at seven per cent.,||$560,000,000|
|Eight billion dollars at three per cent.,||240,000,000|
|Bonus to the bankers and usurers,||$320,000,000|
Thus it will be seen that, with interest calculated at nine per cent., labor will be required to pay to capital fifty per cent. over the entire increase in the national wealth, and with the interest at seven per cent, to pay eighty millions of dollars annually over the increase of the wealth of the nation. While money is constituted with such overwhelming power, it is no wonder that most of the agriculturists are forced to deprive themselves and families of the most common luxuries, or that the laborers in all departments of industry are compelled to toil for a mere subsistence of food and clothing, and this of the poorest kind in many cases, or that squalid poverty so much abounds in our large cities.
Notwithstanding the great benfits this system would confer on the soldiers and wealth producing classes and the Government, the patriotic bankers and usurers and their allies, the professional politicians and sensation newspapers, will offer a
32united and determined opposition to its adoption. They know that to establish a just monetary system will take from them the means by which they have so long been enabled to defraud, labor of its just rewards, and that their occupation will be gone. I now propose to notice, very briefly, a few of their objections.
1st. They will argue, that if this system is adopted, money will become so plenty that it will be valueless. This argument has no foundation in fact, for the money issued under it, being convertible into Government Blocks, will have a permanent and uniform value. This the bank promises never had and never will have under any banking system. Besides, the proposed system does not contemplate the discounting of individual notes or loaning money on any kind of securities by the Government, it only authorizes the paying of it out for services rendered or supplies furnished to the Government, so that before the individual can get the money, he must furnish the Government an equivalent in something of real value, it cannot therefore make money more abundant than it should be, for if there is a necessity for a dollar to represent A.'s dollar's worth of production, there exists an equal necessity for a dollar to represent the like amount of production by B., and so of all the productions of the nation.
2nd. They will argue that to lower the rate of interest on money will raise the price of all the products of labor, and consequently will be oppressive to labor. This argument is equally groundless; for, if the products of labor are high, labor will be high also. Keeping down prices by raising the rate of interest on money, is simply robbing labor for the benefit of capital. I have elsewhere shown that there are but two purposes to which the products of labor can be applied. One is to the payment of rent or interest on capital, and the other to the payment of labor. As you raise the rate of interest on money, you increase the gains of the capitalist and decrease the value of labor.
3rd. They will argue, that, however beneficial the results of this system might be, the change cannot be made. That since money never has been instituted on a just principle, it never can be. This is the argument used by kings and despots to prove that they have a divine right to rule, and that a democratic or republican government is a trespass against divine authority, and never will be permitted to stand except for a brief period of time. It has just as much force and reason in the former case as in the latter.
The Common Sense way of Providing for the Wants of the Soldiers, and doing Justice to Labor.
Government is instituted for protection of life and property; both should therefore share alike in the sacrifices necessary for its maintainance and perpetuity. It is an indispensible prerogative of sovereignty to command the life and property of the subject when necessary for the preservation of the Government, for no government can be permanently maintained where the military power and national finances are not controlled by the sovereignty. In our Government the supreme power is vested in the people. It is their right to direct and control its operations in the way and manner that to them may seem best. Therefore, no one worthy of the privileges and rights of a freeman will withhold the means necessary for its preservation, whether in life or property.
We are in the midst of a gigantic rebellion threatening our very existence as a nation, and which must be suppressed at whatever sacrifice of life and property may be required. The sacrifice of valuable lives has already been fearfully large, and the cost in treasure is only counted by thousands of millions of dollars, and still the call comes for more men and more means, and the emergency demands a prompt response to that call. For the establishment of this (the government of the people,) our fathers pledged their lives, their fortunes and their sacred honor. We are now called upon to renew these solemn pledges for its preservation and perpetuity, and every freeman says in his inmost heart it shall be done. But while there is almost a universal desire and determination that it shall be done, there is a division of opinion as to the beat manner and means of accomplishing the object. The war has proved of greater magnitude than many, at least of our more sanguine citizens, believed it would reach when it commenced; but, notwithstanding the unprecedented extent of the demand for men and means, the nation has been able to meet them out of its own resources, and to-day it is stronger than when the rebellion first commenced. Both the magnitude and duration of the war have tended to change its character. Had it been but an ordinary rebellion which could have been subdued in a few months, its effects on the nation would have been only temporary, but as matters have turned out these effects are to be felt for half a century at least. Let us then calm our passions and lay aside our pre-conceived opinions and prejudices on questions of military and financial policies, and take a calm, intelligent and comprehensive view of our present circumstances and future wants, and then adopt the policy dictated by justice and common sense for our future guidance, and all will be well.
The wants of the Government are, men, food, clothing; the
34arms and munitions of war, and the means of transportation. The want of the producers and distributors of the national wealth, to whom the Government must look for supplies, is a sound reliable currency that will be a correct medium of distribution to capital and labor. The Government has exercised its sovereign power in filling the ranks of the army and, in some instances, for procuring supplies, but it has been a suppliant at the shrine of an unjustly constituted money power, for the bankers and usurers have dictated the financial policy of the nation, and regulated it to suit their own selfish ends, without regard to the interests of the Government and people. When the rebellion commenced, money was only worth from four to five per cent., in our commercial centres, on first class securities. The first demand made on the Government was seven and three-tenths per cent., and even at this extravagant and unjust rate, the bankers coupled the condition that the Government should issue its own notes to a very limited extent, (fifty millions demand notes,) by which the bankers still retained the monopoly of the currency, and when it became imperative for the Government to make a farther issue of its own notes to meet the demands on the Treasury, they opposed the measure at every step with all their power, and by their operations in gold in Wall Street, their subtle arguments, and other powerful influences and appliances at Washington, they succeeded in moulding the national legislation to suit their views and interests. They yielded only so far as to allow the issue of Treasury notes to pay for the services of the soldiers and for supplies, but retained the control of the currency, and succeeded in securing the issue of Government bonds, bearing bankrupt rates of interest, and that payable in coin. The rates of interest authorized on the Government securities are six per cent. and seven and three-tenths per cent. per annum, payable semi-annually in coin, which, with gold at fifty per cent. premium, is equal to nine per cent on the former, and eleven per cent. on the latter, in the money of trade (Greenbacks,) in which the soldiers and producers are paid for their services and supplies, and which is all that any truly loyal man wants. It was therefore an act of gross injustice to make the interest on the Government securities payable in coin, by which the mere drones of society will be enabled to rob the wealth-producing classes who, with the soldiers, are the real supporters of the Government, of their just rewards. The present financial policy of the Government is a, fraud on the rights of the people — a cunningly devised scheme to rob the industrial classes for the benefit of a few bankers and usurers. Let us look at its effects.
We have said that when the rebellion commenced money was only worth from four to five per cent., in the commercial centres, on first class securities, it is now worth from nine to
35eleven per cent. on Government stocks, which ought to be first class security in the estimation of every loyal man in the nation. For the purpose of presenting the practical workings of this system, we will assume the average rate of interest on money in large loans, to have been four and a-half per cent. at the commencement of the rebellion, and the interest on the Government securities to be now equal to nine per cent., and that the bankers and usurers are enabled to loan the interest, when earned and paid, at the same advanced rate: $1,000 at 4Ë per cent. will earn $45 per annum, this loaned at 4Ë per cent. will earn $2.02Ë per annum, while $1,000 loaned at 9 per cent will earn $90 per annum, and this loaned at 9 per cent. will earn $8.10, which is four times the amount of $45 at 4Ë per cent. To these facts the usurers cannot object, for with the extension of the time the ratio of increase becomes greater. For instance: $1,000 at 3 per cent. for fifty years will earn $3 388, and $1,000 at 6 per cent. for the same time will earn $17,600, and at 9 per cent. the amount will be $73,425. Thus the accumulation of interest at 9 per cent. will be over four times as much as at 6 per cent., and over twenty-one times as much as at 3 per cent., and over four times as much at 6 per cent as at 3 per cent, for fifty years.
Thus it will be seen that money has not only been exempt from the sacrifices that labor and human life have been subjected to, but, on the contrary, its value, and consequently its power over property and labor, has been increased four fold by the rebellion; and this too without rendering the Government or people any service whatever. If there had not been a bank note or a gold dollar in the nation, at the commencement of the war, we should have got along infinitely better in a financial point of view than we have. Gold and its worshipers have waged a continual war against the interests of the Government and people, during all our troubles, and it is of no more use to us to-day than if every ounce of it was still in the California mines. As for bank notes, they have been and are, a fraud upon the rights of labor, no matter under what authority they are issued, whether State or National, their character is the same, and every truly loyal man in the nation prefers the plighted faith of the nation, in the shape of a legal tender Treasury note. This is the only money that has been truly loyal, and to it we are entirely indebted for our successes. The soldiers and producers have always been willing to accept it for their services and supplies, and these are the classes that have defended and sustained the Government, and upon whom the future hopes of the Republic depend. It is then the duty of the Government to protect the rights of these its real supporters rather than become an instrument in the hands of a few bankers and usurers for their oppression and degradation.
The great mass of the loyal people are willing and anxious that the wants of the soldiers and their families should he suitably provided for, and for this purpose, they are contributing freely. But the present effort is only temporary — with the close of the war it will end. True, some steps are being taken to provide for the education of the orphans of soldiers, but no individual effort can be commensurate with the wants of this class. It is the duty of the Government not only to provide for their present, but for their future wants, by paying them a just compensation for their services, and by giving a liberal pension to the families of those who may fall in battle. Neither the soldier nor his family should be left to the cold charities of the world. The means of present supply for himself and family and of future support for his family, in case he should, fall in battle, should be guaranteed under the broad seal of the nation. The Government should rule righteously, doing justice to all classes and interests; it should secure to the soldiers and producers and distributors what is justly due to them, and withhold nothing from the bankers to which they are entitled.
The present pay of a soldier in the ranks is thirteen dollars per month, with a bounty from the Government averaging about three dollars per month, making a total of sixteen dollars per month, and in case of his death in the service his family draws a pension of eight dollars per month. No fair minded man will claim that the monthly pay of the soldier is a fair compensation for his arduous duties and services, and the perils and dangers to which he is necessarily exposed, or that the pension of eight dollars a month is not wholly insufficient to meet the wants of a family. There are thousands of good men prevented from entering the army by the claims of a dependent family. Let the Government remove this objection by properly compensating the soldiers for their services, and by making ample provisions for the future wants of the widows and orphans of those who may fall in battle, and by doing justice to the wealth-producing classes who are furnishing it with all needful supplies, by establishing a just financial policy and a true monetary system that shall be a correct medium of distribution to capital and labor. Then the ranks of our army will soon fill up, and the people will cheerfully furnish all necessary supplies. New life and energy will be infused into the whole nation, and the war ended in a very brief period, and with the return of peace will come national and individual prosperity. This duty becomes the more imperative on the Government if it can be shown that this can be done and at the same time the burdens of future taxation on the wealth-producing classes greatly diminished, I have shown that the value of money has been increased at least four-fold by the rebellion, while the soldiers pay has remained unchanged, and
37until very recently the compensation of labor, in most departments of industry, has not been increased. Simple justice requires that matters should be reversed, and that the pay of the soldier in the ranks should be increased four-fold, or to Sixty-four dollars per month, and the pay of the non-commissioned officers increased in the same ratio, and the pay of commissioned officers raised sixty per cent. and pensions fixed at four hundred dollars per annum. This should not only be given to those who may hereafter enlist, hut to all who have been in the service since the commencement of the rebellion, for the whole time of service. It would be an act of gross injustice to pay it to those who may hereafter enter the service, mid withhold it from those who have borne the burden and heat of the conflict. Each soldier should be charged with all bounties he may have received from any source whatever; this will place all on exact equality. If you mean to provide for the wants of the soldier and his family, this is the common sense, business-like way of doing it This saying, be ye fed and clothed, while you do nothing to relieve their necessities, is but adding insult to wrong.
From what has been said of the accumulative power of interest on money, I think it will be admitted that three per cent. is as high a rate as can be maintained on loans without doing injustice to the wealth-producing classes, or labor, and that with money properly instituted, there exists no necessity for the payment of a higher rate.
I now propose to show that by substituting the True American System of Finance for the bankers' and usurers' scheme, the Government will be enabled to pay the soldiers the wages that we claim are justly due to them, and to give to the widows and orphans of those whose lives may be sacrificed for the preservation of the Government a pension that will at least secure them against want, and which shall not be a disgrace to the nation, as the one at present given certainly is.
In order to meet the objections of cavilers who claim that this system of finance will raise the price of Government supplies, we will double the cost of all the supplies yet to be furnished and other expenditures of the Government yet to be made, and then show that the cost to the tax payers by the True American System of Finance will be but a fraction over one-tenth of the amount required by the bankers' scheme.
Having assumed that the cost of the war, conducted under the national financial policy now in operation, or about to be inaugurated, will be two billions of dollars, and that the principal of the debt will not fall below that amount within the next fifty years, and that the bankers and usurers, having the power to regulate the rate of interest on the Government bonds, will maintain the rate at least as high as nine per cent. in the money of trade, which will be their own notes mainly,
38we will now, for the purpose of comparison, assume that a force equal to one million of men for three years in the army and navy, will be required for the suppression of the rebellion, and the payment on account of pensions to equal one hundred and fifty thousand full pensions annually, and estimate that two-thirds of the Government supplies have already been furnished, — the relative cost of the two systems will be as follows:
|By bankers' and usurer's scheme.|
|Pay of one million of men for three years at $16 per month, including bounty,||$576,000,000|
|Add 25 per cent. extra pay to com'd officers,||144,000,000|
|Total pay to officers and men,||$720,000,000|
|Leaving for Gov. expenditures and supplies,||1,280,000,000|
|Annual cost to tax payers,|
|$2,000,000,000 at 9 per cent.,||$180,000,000|
|150,000 pensions at $96 per annum,||14,400,000|
|Total yearly cost,||$194,400,000|
|Result at the end of fifty years with respect at 9 per cent.|
|$2,000,000,000 at 9 per cent. for fifty years,||$148,851,000,000|
|150,000 pensions with interest at 9 per ct.||11,748,080,000|
|Total for interest and pensions,||$160,599,080,000|
|Result at the end of fifty years, with respect at 8 per cent.|
|$2,000,000,000 at 8 per cent. for fifty years,||$93,843,505,152|
|150,000 pensions with interest at 8 per cent.,||8,265,915,463|
|Total for interest and pensions,||$102,109,420,615|
|Result with interest computed at 7 per ct. for fifty years:|
|$2,000,000,000 at 7 per cent.,||$59,013,051,268|
|150,000 pensions with interest at 7 per cent.,||5,771,627,727|
|Total for interest and pensions,||$64,784,678,995|
|The whole amount paid to the soldiers for services and pensions, and to the wealth-producing classes for supplies and other labor, under the bankers' and usurers' scheme, will be as follows:|
|Paid soldiers for services,||$720,000,000|
|Paid soldiers for pensions,||720,000,000|
|Total pay to soldiers,||$1,440,000,000|
|Paid to industrial classes for supplies, etc.,||1,280,000,000|
|Total for services, supplies and pensions,||$2,720,000,000|
|The amount that the wealth-producing classes will have to pay to money for accumulations by interest on this sum of two billions, seven hundred and twenty millions of dollars, at the active rates of interest for fifty years, will be as follows:|
|With interest reckoned at nine per cent.,||$157,878,820,000|
|" " " eight "||99,389,420,615|
|" " " seven "||62,064,678,995|
I have presented the result at these several rates of interest for the benefit of those who may place a higher estimate on the patriotism and generosity of the Shylocks than I do, and not with the idea that they will be of any practical use in the future. I have elsewhere shown that, under the bankers' and usurers' scheme, the sharks will have the power to regulate the rate of interest on the Government bonds and in business transactions, independent of the Government and people. Gold is now at a premium of fifty per cent., which makes the interest on Government securities equal to nine per cent. in the money of trade, and to suppose that they will permit it to fall to a lower rate when their power over currency is increased, (as it will be when they get their big shoddy banking system, mis-named National, in operation,) would be to reject all the teachings of past experience. I shall not therefore consume time nor uselessly occupy the attention of the reader with calculations at lower rates of interest than nine per cent., as it will more likely rise above that figure than fall below it.
|Pay of one million of men for three years at $64 per month,||$2,304,000,000|
|Add ten per ct. extra pay to com'd officers,||230,400,000|
|Total pay to men in army and navy,||$2,534,400,000|
|Two-thirds of supplies, etc., already made,||853,333,333|
|One-third of supplies, etc., yet to be made, the cost of which we have doubled,||853,333,333|
|Total for supplies, etc.,||$4,241,066,666|
|Deduct Treas. notes issued without interest.||600,000,000|
|Leaving, to bear interest at 3 per cent.,||$3,641,066,666|
|The annual cost to the tax payers:|
|Interest on $3,641,066,666 at 3 per cent,||$109,232,000|
|150,000 at four hundred dollars each,||60,000,000|
|Total annual cost,||$169,232,000|
|Result at the end of fifty years:|
|$3,641,066,666 at 3 per cent. for fifty years,||$15,978,651,575|
|150,000 of $400 each, with 3 per ct, 50 "||6,776,907,900|
|To redeem Treas. notes at end of fifty "||600,000,000|
|Total at the end of fifty years,||$23,355,559,475|
|The amount paid soldiers and wealth-producing classes in the first instance, will be as follows:|
|Paid for services of men in army and navy,||$2,534,400,000|
|" 150,000 pensions annually for fifty years.||3,000,000,000|
|" for supplies, labor, etc.,||1,706,666,666|
|Total for services, pensions, supplies, etc.,||$7,241,066,666|
|Total cost by True American System, for 50 years, including accumulated interest,||$23,355,559,475|
|Deduct above am't paid for services, etc.,||7,241,066,666|
|Accumulations by interest, or money's share at the end of fifty years,||$16,114,501,809|
Thus it will be seen that, if the bankers' scheme should become the permanent financial policy of the Government, the soldiers and their families will receive for services and pensions only $1,440,000,000, while, if the True American System of Finance be substituted, they will receive for services and pensions, $5,534,400,000; or nearly four times as much as under the former system. Under the former policy, the producers and distributors will receive, for supplies and other labor, $1,280,000,000, while, under the latter they will receive $1,706,666,666. Total receipts of soldiers for services and pensions, and by the wealth-producing classes for supplies, etc., under the bankers' scheme, $2,720,000,000. Under the operations of the True American System, these classes will receive for services and supplies $7,241,066,666; the accumulations by interest on which sum, for fifty years, at 3 per cent. per annum, will be only $16,114,501,809, while, by the bankers' scheme, the accumulations by interest on $2,720,000,000 for the same time, will amount to the enormous sum of $157,878,820,000, being nearly ten times (8-80) as much as the accumulations on $7,241,066,666, under the True American System for same time. If we take into account the larger amount received in the first instance by the soldiers and industrial classes, and the smaller amount required to be paid to capital in the end, the accumulation by interest, under the True American System, will be found to be less than four cents (3-84) on the dollar of the amount that will accrue under the bankers' and usurers' scheme. When we add to this the gain that will inure to the industrial classes, by the reduction of the rate of interest on money in all business transactions, under the True American System, the benefits will far surpass the burdens of taxation imposed on them by the national debt. But the bankers and their allies will oppose this, or any other measure, having for its object the benefiting of the soldiers and wealth-producing classes. I propose to notice a few of the arguments, the professional politicians and sensation newspapers in their interest make use of for them:
411st. They will endeavor to frighten the loyal and patriotic people with the threat, that they will withdraw their support from the Government if an attempt is made to establish a just financial system and a correct medium of distribution to capital and labor. The soldiers, and all other loyal men, have just as much to fear from the execution of this threat as the slaves in the south would have from a similar one made by their masters — that if they did not remain quiet under the lash, they (the masters,) would run away and leave to the slaves all the property they had made by their labor.
2nd. Another of their favorite arguments is, that the soldiers and producers will not take Treasury notes and Government bonds issued under the True American System of Finance. This was one of their arguments against the issue of Treasury notes in the first instance. It was false then, and is so now. There is not a soldier, or any other disinterested loyal man, in the nation who would not prefer legal tenders or Government stocks, issued under the proposed system, to bank notes issued under any banking system we have had, or under the proposed shoddy system miscalled national.
3rd. Another favorite argument with them is, that it would be absurd to pay common laborers the wages we propose to give the soldiers, who, they say, compose mainly the rank and file of the army. I fail to see the force of this argument, — for what the Government wants is good soldiers, and I think common laborers would be as likely to make good soldiers as bankers, usurers and professional politicians, or as any other pensioners on the public bounty. Under the system we propose, the entire annual cost of the soldier to the Government would be as follows:
|Pay sixty-four dollars per month,||$768.00|
|Three hundred and sixty-five rations at 30 cts. each,||109.50|
|Total annual cost,||$919.50|
I think it will be admitted that there is nothing extravagant or unreasonable in the pay we propose to give the soldiers, when we consider that it is below the average pay of common clerks in the employ of the Government, who do not work on an average over six hours a day. The duties of the soldier are certainly as arduous and their services as important to the Government as that of these clerks, and I see no good reason why they should not have as much pay; besides, we know many in the ranks of our army who are as well qualified for the discharge of the duties of these clerks as any in the employ of the Government, and who, in point of intelligence, integrity and all that constitutes true manhood, are the peers of our representatives in our national councils.
4th. They argue that it is unnecessary for the Government
42to make farther provisions for the soldiers and their families; that the patriotic people will provide for their wants, which, at best, means no more than that the good people will furnish them with cold victuals and old clothes.
5th. Their main argument however, is, that to compensate the soldier justly for his services, and to make proper provisions for the widows and orphans of those whose lives may be sacrificed on the altar of their country, will bankrupt the Government. It will, we think, require a great amount of financial acumen and political jugglery to make it clear to the people how they are to be bankrupted by the financial system we propose any more than they would be by the bankers' and usurers' scheme.
The ability of the Government to pay the cost of the war is not involved in the discussion of this subject. That question has already been settled beyond all contingency. The nation has so far provided, and can in the future provide, all the means, both in men and supplies, necessary for the prosecution of the war, until the rebellion is entirely suppressed.
The only question presented on this point for our consideration is, the equitable distribution in the disbursement of the public money, and of the future burdens of the war among ourselves, and the establishing of a true monetary system for the just reward of labor in the future. If we are only successful in attaining these ends, we will soon recover from the financial effects of the war, and enter upon a career of national and individual prosperity heretofore unknown to us as a nation. But if, in our legislation, we fail to recognize, or if we disregard the rights of labor, and permit the bankers and usurers to control the financial policy of the Government to promote their own interests, labor, whether employed in the army or any other department of useful industry, will be degraded, poverty and crime increased, and the wealth-producing classes reduced to a state of vassalage or slavery.
Reader, the issue is made up, you must take one side or the other of the question. There can be no neutrality. If you believe that one-tenth of the population, and these strictly non-producers, should control the monied interest of the nation, dictate the policy of the Government and fix the rewards of labor, whether employed in the army, on the farm, in the mine, or any other department of industry — that the soldiers and wealth-producers have no rights which the bankers and usurers are bound to respect — that the products of the labor of nine-tenths of the population should be given to the other tenth, without compensation — you should exert your influence in favor of the bankers' scheme, and refuse to accept Greenbacks for services and supplies rendered the Government, and insist upon faithless bank promises in payment; or, what is tantamount to working for their scheme, remain idle and passive, and they will complete your degradation, and rivet the chains of slavery upon you and your posterity.
On the other hand, if you believe that the soldiers and wealth-producers have the intelligence and virtue necessary for self-government — that they have rights which should be protected, and which the bankers and their allies should be taught to respect, you should exert your utmost influence to secure the adoption of a true monetary system that will justly reward labor; you should peremptorily refuse all bank promises, no matter what specious title they may bear, and accept nothing hot Greenbacks for your services in the army, and for the products of your labor, in any department of industry. The Government has no more right to force you to take faithless bank promises for services and supplies, or tax you for the benefit of the bankers and usurers, so long as you are willing to receive the plighted faith of the nation in the shape of legal tender Treasury notes, (Greenbacks,) than it has to compel you to pay the thief, who has stolen your horse an exhorbitant price for your own property.
The motto of every true man should be, the last man and the last dollar for the suppression of the rebellion and the perpetuity of the Government, but not one farthing of tribute to the bankers and Shylocks; no compromise with oppression and fraud, no matter from whence they come. Speak out, soldiers, producers, distributors and loyal newspapers, let our law makers and government officials know where you stand upon this important question. Every dollar of bank currency put in circulation necessarily takes the place of a like amount of greenbacks, and increases the national tax to pay interest on the Government bonds, taking from the soldiers and their families, widows and orphans, what is justly due them, and giving it to the hankers and Shylocks without consideration, and is therefore a fraud on the rights of the people. Reader, are you in favor of paying the bankers and usurers one hundred dollars, without consideration, rather than pay the soldiers and industrial classes, who are the real defenders of the Government, ten dollars and twenty cents for full value received?
We ask the bankers and their allies, the professional politicians and sensation newspapers, to show one single advantage that is to be conferred upon the Government and people by their shoddy banking system, (mis-called National,) for the adoption of which you say an imperative necessity existed. Let the people know what that necessity was. Did the soldiers or wealth-producers ever refuse to accept greenbacks, or did they ever ask for the adoption of your banking system? The people want to be enlightened upon this subject, and you should inform them. But you dare not attempt this; your fraudulent scheme will not bear the light.
In the foregoing pages the following propositions have been considered and, we believe, fully sustained:
1st That the value and powers of money are only legal,
44and consequently independent of its material, and that the endowing of any convenient material, by congressional enactment, with the following powers, to wit: power to represent value, to measure value, to accumulate value by interest and to exchange value, will fit it for the performance of all the uses of money.
2nd. That the currency should be under the direct control of the sovereign people, and to be uniform in value must be limited only by the wants of production and commerce.
3rd. That the rate per cent. controls the value of money, and determines what proportion of products shall be awarded to capital and what to labor.
4th. That the present rates of interest on money greatly exceed the increase by natural production and consequently cannot be maintained without impovershing the wealth-producing classes, and rapidly centralizing the property of the nation into our large cities, and into the hands of the few bankers and usurers.
5th. That the proposed shoddy banking system, mis-named National, is founded on a wrong principle, that it will not free the people from the evils of the old system, but will, in many instances, greatly increase them; that it is a cunningly devised scheme to defraud the soldiers and wealth-producing classes out of their just rewards for the benefit of the few bankers and usurers.
6th. That the monetary system we present is founded on the principle of justice and common sense, and will place the monied interest of the nation under the direct control of the sovereign people, where it rightfully and necessarily belongs; that by its adoption the Government will be enabled to make suitable provision for the present and future wants of the soldiers and their families, justly reward labor, and at the same time greatly diminish the burdens of taxation.
We have discussed the rights of capital and labor for no other purpose than that of convincing the public that the high rates of interest on money, favored by our present unjust monetary laws, whilst stimulating the enterprise of the very few, and certainly securing to them great wealth, represses the enterprise of the great mass of the people, by depriving them of the just reward of their labor, and tends to the increase of pauperism and crime, and the inevitable overthrow of the Government. And that justice to labor, while it will secure individual comfort and happiness to all who are able and willing to work, will rapidly develop our natural resources and greatly increase the national wealth.
It has been shown that labor constitutes the real wealth of a nation, and without claiming for it any thing more than its natural rights, we insist that these should be guarded by the most jealous care of the Government.
The rights of property can only be protected by general laws. It is utterly impracticable for the Government to have a supervision over the individual agreements and business transactions in the nation. All it can or ought to do, in this important matter is, to make such general laws for the government of property as will naturally tend to effect its equitable distribution. A careful examination of our monetary system will convince any candid mind that our present laws of distribution are continually doing a great wrong to the people, and that under their operation labor is not and cannot be properly rewarded. A change is indispensable, and the present necessities of the Government afford a favorable opportunity for effecting this most desirable reform. It is now for the American people, whose government is founded on the principles of equality and freedom, to establish the rights of labor, which in the past have been disregarded, except as they ministered to the extravagance and luxury of a privileged class.
We believe that the adoption of the monetary system here proposed will prove an effectual remedy for these great evils; that it will as certainly reward labor as the one now in force has oppressed it. But the question arises, how and by what means can its adoption be secured?
Those directly interested in the adoption of a true monetary system are:— all Christians, philanthropists, agriculturalists, manufacturers, mechanics, laborers; in a word, all who wish to earn a support by honest industry. But above all others, our soldiers who are enduring the privation and trials of camp life, and periling their lives on the battle field in defense of our free institutions. They are learning by painful experience the value of freedom and justice. The establishing of a just medium of distribution to capital and labor will secure to at least nine-tenths of our population the pecuniary benefits which are justly due them, and the remaining tenth will be left in the undisturbed possession of their present wealth, and, like their fellow citizens, at liberty to increase it by any useful employment. It might naturally be thought that none would oppose a system so beneficent in its results, but the sway which selfishness and avarice holds over the minds and hearts of men who worship at the shrine of mammon, will lead them to offer a determined resistence to the adoption of this or any other system, having for its object the just reward of labor. And, though their numbers are comparatively small, let not the friends of justice flatter themselves with the hope of an easy victory. The bankers and usurers have so long controlled the currency and monied interests of the nation, and through these
46means the finance and general policy of the Government, that, like all other despots, they have come to claim it as a divine right, and be assured they will not relinquish this power without a determined struggle. They are thoroughly disciplined and organized for the conflict, and will be unscrupulous in the use of all the means at their command. The almighty dollar is the power they mainly rely upon. I have elsewhere shown the enormous amount of this motive power of which they have defrauded labor, and which they will use to retain their power over the Government and people. They know that public opinion is next to omnipotent, and through the medium of the public press they manufacture and control it to suit their own purposes. Many of our leading journals, particularly those of the sensation order, are established and conducted by them for this express purpose, and many others lend their influence to aid them in the consummation of the basest transactions for the sake of a little filthy lucre. Through these means they have been enabled to elect to our State and National Legislature, and elevate to other positions of high trust, mere professional politicians, who are as much in their interest and under their control as if they were employed by them in a direct business capacity. If they fail to secure a controlling influence in this way, they will threaten the weak and timid with the power of the press, and many who are naturally disposed to do right are in this way driven to support their corrupt measures, and if there is still a deficiency, they have the thirty pieces of silver to make it up. By these means they have controlled legislation, State and National, not only regardless of the interests of the wealth-producing classes, but in direct opposition to justice. Nor has their power stopped here. It has entered the halls of justice and influenced the decisions of the courts, defeating the ends of justice. It is felt even in the sanctuary, in many instances closing the mouth of the professed man of God against practices most positively and expressly forbidden in the word of truth. It was not so, however, with the Good Master himself; when he found the predecessors of these bankers and usurers in the temple, knowing their true character, he named them properly and treated them justly. If the American people would preserve their Temple of Liberty, pure and undefiled, they must do likewise.
When we consider the almost unlimited sway these enemies of liberty and justice hold over the government of the nation, and the means they have for perpetuating their rule, they become indeed a formidable power, and one well calculated to intimidate and discourage the weak and doubting. But the greatness of their power and the manner in which they have used it, are among the main, and are of themselves a sufficient reason for its utter overthrow. The Government must rule over this unjustly constituted money power, or it
47will rule over the Government and people, and instead of the Republic being what its founders intended it should be — an asylum for the oppressed of all nations — our own citizens will be able to find relief from its oppressions under the most despotic government in Europe.
Having pointed out the powers of the bankers and usurers, and some of the means they will use to retain it, we come now to notice some of the means at the command of the friends of right and justice, and the manner of using them for the overthrow of the power of their oppressors. In doing so, I desire to address you by no party name or nationality, but as AMERICAN CITIZENS, HAVING A COMMON INTEREST AND A COMMON DESTINY.
Before going into this conflict of right and justice against wrong and oppression, there are lessons to be learned, virtues to be practiced and duties to be performed. We must learn that all great political and social reforms, to be permanent, must begin in the lowest stratum of society and work upward, and that oppressions originate in the upper and press downward. This greatest of reforms must begin with and be consummated by the people. That intelligence and virtue in the sovereignty are necessary to a wise administration of justice under any form of government, and that it is not of so much importance whether a democratic or republican administration controls the Government, as that it be wisely and justly administered. That, as each citizen is an integral part of the government, he has important duties to perform — duties too sacred to be neglected or entrusted to any one — and which he should earnestly seek to know and faithfully perform. He should therefore think for himself and act on his own convictions of right and duty. He must divest himself of all preconceived opinions on questions of financial and other governmental policies, when convinced that they are erroneous, accept truth and reject error, regardless of their source; eschewing all party prejudice, he must meet and act with his fellow citizens for the common welfare. He who is unwilling to do these things cannot be a good citizen of a free government, for this is the only way the general good can be promoted and a successful effort made against the common enemies of labor in every department of industry. The interests of employer and employee is mutual. No lasting good can result to either from the compulsory measures or strikes, so often resorted to. The permanent interest of both can only be secured by the overthrow of the present falsely constituted money power. Having learned these lessons and determined to perform our whole duty, we are ready to go to work with the certainty of success.
The first thing to be done is, to petition Congress demanding the repeal of the shoddy banking system mis-called National, and the adoption of a just and true monetary system
48that will give to labor its just reward. If the representatives of the people have any doubts as to which system the soldiers and wealth-producing classes prefer, ask them to submit the question to the decision of the people at the ballot box; this they cannot refuse, if they mean to represent the people at all. But above all, you should not fall to demand of Congress justice for the soldiers and their families, widows and orphans. You should positively refuse all bank notes, no matter what system they are issued under, and insist upon legal tender Treasury notes (Greenbacks,) in payment for services and supplies furnished the Government. You should protest against the issue or sale of Government bonds bearing greater interest than three per cent. per annum, or payable in anything but lawful money of the United States.
Second. You should form your Town, County and State organizations so that an intelligent and united effort may be made throughout the whole nation. If you cannot find among the public journals any that will advocate your rights, discard the whole of them and establish others that will. Do not fear a little cost in this matter. Remember that by supporting the newspapers in the interest and employ of bankers and usurers, you are paying for your own oppression and degradation.
Third. You should be careful to sustain those in office who stand by and support your rights, and to select only good and true men for legislative, executive, judicial, and other positions of official trust, discarding all mere professional politicians and demagogues. When a man appeals to you as democrats, republicans, Irishmen, Germans, or by any other party name or nationality, set him down as a demagogue seeking his own interest regardless of your rights. You may safely accept this as an infallible rule, for good men know none of these distinctions. They only know yon as American citizens.
Fourth. You must make this greatest of all reforms paramount to all other issues, saving alone the preservation of the Government. You should stand on no platform, in which these are not the main planks placed side by side, nor support for office any men who are not heartily in favor of both.
Let us then go to work with faith and constancy in the performance of our duties, and soon the ranks of the enemies of a justice will waver and give way before the power of right, and the victory will be won — the rights and dignity of labor asserted — a victory more grand, more sublime, and more beneficent in its results, than was ever won on the battle field. "Let the social position of the laborer to which he is entitled by the ordination of God, in the laws of nature, be ascertained and recognized, and poverty and crime, and most other political and social evils, will give place to competency, virtue and happiness."
No American citizen should be without a copy of this work. Laborer, read and study it. It will teach you your rights.