Ha^TQi rn^'iw i^Jk- % ^mt (^allege of :?^0i:iculture At (JJnrnell IntuctBttH 3tliata. N. .^^Mm^MM^^mMMm^M::. .■>v, \.'i\ii:''*^-"" HG 501X4°'"*" ""'""'">' '■'""'v Cornell University Library The original of tliis book is in tlie Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013815968 OUR MONEY WARS THE EXAMPLE AND WARNING OF AMERICAN FINANCE BY SAMUEL LEAVITT AUTHOR OF " fEACEftlAKEK GRANGE,*' ETC. ' A^. ^,aM. BOSTON \^'''-*^ ARENA PUBLISHING COMPANY Copley Square 1894 LI I I (a) ) 4 Copyright, 1894, by SAMUEL LEAVITT. Ali rights reserved. Arena Press PREFACE. The title, index and table of contents of this book suffi- ciently indicate its scope. Although it has been sent to but a few leading periodicals as yet, the annexed " Press Notices " show that the claims set up for it are beginning to be acknowledged in very prominent publications. The book purports to be a condensation of the chief financial events, data and arguments that have been chronicled during the past twenty years in all the literature of what is now called the Populist Party. If the views set forth here are mainly correct, the financiering of this nation, as managed by the Republican and Democratic parties, has been a huge madness. Therefore it behooves the would- be leaders of public opinion to seriously consider a book that is being rapidly acknowledged as the most authori- tative statement of " The American System of Money." CONTENTS. CHAPTER I. 1600 TO 1700. PAGE The first American Money i The first Bank-notes , The British Debt ',\'_\ 4 First American Paper Money 4 CHAPTER II. 1700 TO 1776. More Paper Money 6 Truth about John Low 5 Speculations in France in 1720 , 12 Speculations in England in 1720 13 Paper in the Colonies 13 The Money of the Poor ig Continental Money 19 CHAPTER III. 1776 TO 1786. Continental Money (continued) 1 . . . . 24 Jefferson to Epps, 1813 24 The first Savings Banks , ' 26 Shay's Rebellion in 1785 27 The Bank of North America 28 CHAPTER IV. 1786 TO 1796. The United States Begin '. 29 The first United States Bank 31 The United States Mint 33 Money of Account 34 The Value of Foreign Coins 35 The Foreign Loans 36 CO:.'TE.VTS. CHAPTER V. i-r/j to iVA. The Ear.k ^A \ Fortivn Co:-.. Srrirtll Coiiii.. CHAPTER VL For^isn-Cc:n= 39 V.:Id-ca.t F-ar.k.^ 39 FIticttiationj of Gold in Etydarid 39 S --i:i Banks '. 43 I' ttr^sv'.^ar;- i' Trea-'urv !Notes 41 1':.-. Act of ' .-e 30. 1S12 41 The Act of Febr.ir- 2:. 1413 42 T*r-rv^n Di= waited /.. ; 42 Tr.e'Aot of Mar-.;-. 4, iSii, 43 A.n Or-lg;na'. Gr^'^rioar.i'jr 43 Legal Ttr.der to Go -, ^mmer.: 43 Hot EanLii are Created 44 A FLzl-.t a-i-aL-i_st Tr-ia-^'ir-,- Xotes 44 AnO'd-torv ' 47 Madison on fr^ias jr.- Xote? 47 Pap-rr MontT Brok-i tl-.* Po'A-er of tie f..---t Xapoieon 47 CHAPTER VIL I 1^16 TO rli^- "c.rr..cvTh.ori^ For-ian'Cok:^ 45 Peel's P^.Kij: CHAPTER VIIL i:;oTO li^-S. jPct .Steadv Currer.oy of France r- Gen. jacKsor. -.a-re^ Hold 37 >t&!n-^ M^-ar^' :j";;- 144 Black Friday, 1869 146 National Banks Allowed to Surrender their Circulation 147 The Great Refunding Act 148 The Supreme Court and the Legal-tenders 149 Repeal of the Income Tax 1 50 More Wealth in Ten Years than in 250 Previous ' 151 The Three-sixty-five Bonds 151 Carpet-bag Debts 15' French Paper Money 152 The Credit Mobilier and Tweed Rings 1 54 Earnings in Production and in Banking 1 54 Preparing for the Panic of 1873 154 Apotheosis of Jay Gould 155 Germany Kicks 1 57 A Warning Silver Prophet '57 England's Five Billions of Credit Money 158 CHAPTER XIV. 1873 TO 1880. Seven Yf.ars of Famine in a Land of Plenty. The Demonetization of Silver i59 Ernest Seyd 160 The Great Panic of 1873 '^^ The Bank Inflation 172 The Legal-tender Contraction — Field 172 viii CONTENTS. PAGE Pompous David A. Wells I73 The Broken Banks and Trust Companies 175 A Wise English Opinion 176 Little Chit on Banks 177 " Must Trade it out over the Counter" 178 Pulling Down the American Flag , 178 Victorious Grant Conquered 179 The Public Robbers Let Go 180 National Bank-note Redemption 181 The Value of Convertible Currency — Winder 182 Bank Currency for 60 Years 184 The Three Per Cents 184 Horrors of Resumption 185 Who Use Savings Banks 186 What the Hungry Democrats Did in 1874 187 A National Debt a National Blessing — Henry Carey Baird 188 The President of New York Metropolitan Bank Speaks out 188 Drew versus Wells 189 Gold, Flour and Beef 189 live Million Dollars a Day Lost 190 The Resumption Act of 1875 Scorched 190 Dead Wendell Phillips Speaketh 191 Debtor and Creditor Nations — Winder 194 Solon Chase and "Them Steers " 197 Gold-Bug Tricks 199 Ben Butler and Butler Duncan 200 Pandemonium in California 200 Greenbackers Organized December i, 1875 201 Frantic Diabolism of New York -Tribune 201 Congress and Contraction 201 Gladstone versus Gold Basis 203 Trade Dollars Repudiated in 1876 203 Postal Currency Gone 203 Grant does Unintended Good 205 Foolish Calif ornians 206 Democrats Repudiate Resumption 206 • The Bond Age — J 150,000,000,000 206 Coin and Bullion in Europe 207 " Money Market " Easiest in the Hardest Times 207 The Silver Commission and Hard Times 208 " A Mad, Mad World, my Masters " 210 The Buell Circular 212 Stupid Astonishment of the Gold-Bugs 212 What " Gentleman George " Pendleton said 213 " The Leading Papers " 214 No more Trade Dollars in 1877 216 Our Per-Capita Currency 216 Debts in the United States 217 The English See our Amazing Folly 218 " A Year of National Shame " — 1878 219 The Partial " Uprising of a Great People " 219 Bonds not Payable in Gold 22a CONTENTS. The Bland Bill Passed over Hayes' Veto 221 The Chicago Inter-Ocean Told the Truth Then 222 Ernest Seyd on Silver Demonetization 223 P'ourteen Dollars Per Capita , 224 A Million and a Half Greenback Vote and 20 Congressmen in 1878. 224 The Greenback Remonetized by Sherman, who was Scared 225 Chicago Tribune on the Fraud of 1873 ^-^ The " Leading Paper " Caught Napping 226 Failures in Business 228 " One Soweth — Another Reapefh " 229 A' Resolute Start 229 A Devouring Demon in Philadelphia 230 England a Thousand Millions Out 231 California Cleansed 232 Gold Big-Bug Papers j- 232 The Interest Equals the Public Debt 233 What Gold the Banks Had 234 Bonds Sold after January i, 1876 234 Gold Rushes from Europe 235 Paper Money in the United States for 21 Years — Heath 236 CHAPTER XV 18S0 TO 18S5. The Triumph of the Plutocrats. Who Held the Bonds 237 Currency of Fifteen Nations 238 (greenbacks and National ISank Notes Compared 239 The Bonded Debts of all Nations 239 To Pay the Bonds at Once 240 Pretty Good Picking 240 Compound Interest 241 Gould Becomes Respectable 241 Another Straw (in 1890) '. 242 The Tonnage of the Lake Ports 242 A Bright Idea— Whose ? 243 The Ohio Idea 244 The Carlisle Refunding Bill— 1881 245 The Bankers' Rebellion 246 Gould Must be Sustained 247 Senator Jones Saw a Great Light 248 Silver Certificates Preferred to Gold , 249 Keene on Gould 249 The St. Louis Republican 249 An Elastic Currency 250 Gold Sticking in the West 251 Wm. PI. Vanderbilt Sells his Friends 251 Eighty-six National Banks Organized in i88i 252 Stocks Go up Two Billion Dollars 252 Severe on Secretary Folger 253 Jesuitical Nonsense 253 CONTENTS. The Gold Drainage from Europe to America 254 F. B. Thurber and liis Anti-Monopolists 254 Interest Coming Down 254 Knox Knocked Out 255 Bank Charter Bill Passed — 1882 256 Bank Profits 259 Trade Dollars in Siam 259 The Water and Gas Gone out of Stocks — 1883 259 The " Seney Crowd's " High Kicking. . . 7 260 Vanderbilt Gets Palaces and Respectability 264 Thurber on the Lard Failures ^. 265 The Trade Dollar Nuisance 266 " These be your Gods, O Israel ! " 266 A Wall Street Panic— 1884 267 The Greenljack Victory in th« Supreme Court 267 Many Marvelous Facts 267 Keene Bucks against " The Wizard " 269 Commodore Garrison Fails 270 " The Blasted Silver Did it " 271 The Bey of Tunis Has Coupon Bonds 272 Back to -State Banking 272 False Statement about France 272 Banks Retiring Circulation 273 The Coming Deluge of Silver 273 Godkin's Ghoulish Glee 274 Wm. H. Vanderbilt still Making Hay 274 The Clearing-house and the Treasury 274 " Union of the Puritan and the Black-leg " 275 Gould's Greatness 276 Not Useful Citizens 277 CHAPTER XVI. 18S5 TO 1893. The Beginning or the End. Belmont — Hewitt — Tildenism 279 Secretary Manning's Panic — 1885 2S0 " Great Heads " Rattled 2S1 A Curious Proposition 282 A 'Coon Treed 283 The Ways of the Robber Nation 283 Lord Chancelors' Gold Pensions 284 What the Soldiers Lost 285 A Deluge of Trusts and Syndicates 285 " Who Make Lies their Refuge " 286 The Old, Old Story— 1SS7 2S6 Blaine Right this Time 288 High Treason 290 A Poor Creature 290 In a Nutshell 291 All Products Save Gold Fall 33 per cent, between 1873 ^"Y\ grains copper. Twenty-seven grains gold, 11-12 fine, were made the value of the silver dollar of 416 grains. The dollar was made the unit of value, and of the money of account ; in which all proceedings in courts of justice were to be kept. Gold was not made a dollar, but 27 grains were made the value of a dollar and legal tender, at that valuation, the same as silver. All coins of gold, silver, and copper were made full legal tender. When the question of the establishment of the Mint was under consideration, by the founders of the Government, Mr. Hamilton, in his communication to the House of Repre- sentatives, Jan. 28, 1791, said: " Upon the whole, it seems to be most advisable, as has been observed, not to attach the unit exclusively to either of the metals ; because this cannot be done effectually without destroying the office and character of one of them as money, and reducing it to the situation of mere merchandise. * * * ^o annul either of the metals as money is to abridge the quantity of circulating mediums, and is liable to all the objections which arise from the comparison of the benefits of a full, with the evils of a scanty, circulation." This is the way in which we "happened" to get our stan- dard silver dollar : Mr. Hamilton had a number of the old Spanish milled dollars, as then in circulation, assayed, and they were found to contain 37 1^ grains of pure silver, and 33 34 OUR MONEY WARS. therefore the new dollar was made to contain that amount — so that the money unit of the colonies, as at that time in cir- culation, was continued as the money unit under the new constitution. Money of Account. — What is called " The Money of Account" — in our country, dollars, dimes, etc. — was estab- lished here in 1792. In some countries it is only an idea. The British pound is ideal. From about 1660 until 1816, the pound sterling had no corresponding piece of coin. The English guinea had been intended to represent a pound. But it had not been prop- erly adjusted ; and, owing also to the fluctuations in the price of gold, it varied in value until 1717, when its value was fixed at 21 shillings. In 1816, after much deliberation, it was decided to fix the weight of the sovereign at five pen- nyweights, three grains, and 623 thousandths of a grain. It is manifest that the whole difficulty was in establishing a coin whose value should correspond to the unit of value of the money of account carried in the minds of the people. The English sovereign has since been changed several times. The people of the United States have undergone a similar experience with pounds, shillings, and pence, — the pounds varying in value in different States, from 4s. 8d. to 8s. to the dollar. There were no coins in existence corresponding to these amounts. These different units of value had their origin in various causes, which we will not stop to discuss : but when industry and trade had become sufficiently advanced, they became fixed. The trade of the colonies with the West In- dies had introduced into the country a considerable amount of Spanish coins. The names and values of these coins did not correspond to the money of account of the people ; and their value was estiniated in the money of account of the several colonies, precisely as that of wheat, or any other commodity, is estimated. In 1792, an Act was passed by Congress with a view to establishing a uniform money of ac- count throughout the country. People reckoned in pounds, shillings, and pence, and paid in Spanish dollars. It will be remembered that Continental money was payable in " Span- ish milled dollars, or the value thereof in gold or silver." The Act of Congress of April, 1792, declared "That the OUR MONEY WARS. 35 money of account of the United States shall be expressed in dollars or units ; dimes or tenths ; cents or hundredths ; and mills or thousandths : * * * and that all accounts in public offices, and all proceedings in the courts of the United States, shall be kept and had in accordance with this regulation." This is believed to be the first time that a money of accoutit was established by law : — money of ac- count having in all other nations grown up in the minds of the people. Sir James Stewart, in his work on Political Econom}', says : — Money which I call money of account, is no more than a scale of equal parts invented for measuring the respective values of things vendible. * * * Money of account per- forms the same office, with regard to the value of things, that degrees, minutes, seconds, etc., do with regard to angles ; or as scales do to geographical maps, or to plans of any kind. In all these inventions, there are some denominations taken for the vmit. In angles it is the degree ; in geography it is the mile ; in plans it is the foot or yard ; in money it is the pound, livre, florin, etc. The degree has no determinate length ; so neither has that part of the scale upon plans or maps which marks the unit : the usefulness of these being strictly confined to the marking of proportions. Just so the unit in money can have no invariable determinate proportion to any part of value. That is to say, it cannot be fixed in perpetuity to any particular quantity of gold or silver, or any other commodity. The value of commodities depends upon circumstances, — their value ought to be considered as chang- ing with respect to one another only. Consequently, any- thing which troubles or perplexes the ascertaining of these changes of proportion, — by the means of a general determi- nate and invariable scale, must be hurtful to trade; and this is the infallible consequence of every vice in the policy of money or coin. * * * it does not follow from this adjusting of the metals to the scale of value, that they themselves should therefore become the scale I The Value of Foreign Coins. — The Act of February 9, 1793, regulates the value of foreign coin in the United States (as the Constitution provided Congress should do) ; making them money of this country, at the valuation placed upon them by this law — for the time stated in the law. Con- gress supposed that the Mint, which they had created, would 36 OUR MONEY WARS. be able to coin into United States money all the gold and silver bullion and foreign coins in three years. This law, therefore, provided that foreign-coins should not be money in the United States after that time. The Foreign Loans. — The Act of March 3, 1795, pro- vides for taking up the foreign loan made to us by France, Spain, and Holland during our Revolutionary struggle. How different was the course pursued by the Fathers of the Revo- lution, and the founders of the Republic, from that of our present so-called statesmen ! Instead of making a foreign loan to pay off a home loan. Congress proposed to make a home loan to pay off this foreign loan, which was- made as a necessity. Small bonds were made for that purpose ; so that all the people could invest in them, and hold them as money. One-half per cent, was allowed the people at home, over and above what was being paid for the foreign loan. " In this way," \^'ebster says, " Hamilton smote the rock, and the waters gushed forth." " He touched the dead bod/ of credit, and it sprang to life." OUR MONEY WARS. 37 CHAPTER V. 1796 to 1806. The Bank of Venice. — When the United States was be- ginning to feel its way toward tlie goal (not yet reached) of a sensible system of money and finance, Napoleon was un- wittingly destroying the wisest system -ever known on this earth. In 1797, he seized the Bank of Venice, of which the following is a fair description : — In 1 17 1, when the gallant Republic of Venice singly with- stood the shock of the Asiatic hordes, that threatened to inundate Europe, Duke Vitale Michel II. called on the wealthy citizens to contribute to a loan of 2,000,000 ducats, for the defense of the State ; the sums so loaned to be en- tered to the credit of the contributors on the books of the Republic. These credits, being divisible and transferable, grew into favor as a currency, performing all the functions of money, and rose to a high premium above gold and silver coin. Such was the origin of the earliest bank of histor)'. In 1423, a law fixed the agio or premium at 20 per cent., and directed all payments, not otherwise agreed on, to be paid at the Bank of Venice ; while at the same time it discontinued the four per cent, interest that had hitherto been promptly paid on the credits. ^This per cent, agio added to the coin ducat of Venice constituted a new unit of value, represented by no coin, yet maintaining its ideal existence, as the ducat of the Bank of Venice ; and rose to an additional agio, — termed a sur agio, — of 20 to 30 per cent. It continued the favorite currency of the Adriatic for nearly 600 years ; until the remorseless march of Napoleonic despotism, in 1797, crushed the Republic. A worthless booty was found in the bank; for it had no coin or deposits, but only a faithful record of the loans that more than 600 years before the citizens of Venice had made, to preserve the life of the Republic. France repaid the citizens; but the bank and the Republic were no more. There was the money of a republic 38 OUR MONEY WARS. having no foundation but credit on the books of a department in its treasury ; with no coin in its vaults, and not bound to malie that credit good in later times, by any payment of interest or any redemption whatever ; which yet stood for hundreds of years at a high premium over gold and silver coin. Plain'and open in all its progress, there was no pecu- lation or steal in any of its processes. Stephen Colwell, in his great work '• Ways and Means of Payment," gives a digest of fourteen authorities about that bank. He says that this credit money amounted to $i6,- 000,000 when Napoleon seized the bank, and that the interest alone saved on each million of ducats was ^6,250,- 000,000,000 — at four per cent, for four hundred years, savings bank interest. He adds : " If credits had been convertible at will into the precious metals, the agio would never have originated, much less have attained so high a point. For the moment holders of credits advanced the price, specie, if a legal tender, would have become the medium of payment, us the cheaper medium. If the same mode of adjusting debts were resorted to now, the result would be that incon- vertible credits would go, frequently, to a high premium over gold and silver." Foreign Coins. — The mint had not come up to the expec- tation of Congress. The Act of Feb. i, 1798, therefore extended the legality of foreign coins for three years longer; and some of the valuations thereof were changed, adding to their legal tender value. Small Coins. — The Act of April 24, 1800, provides for the purchase of copper to coin into cents and half cents, which were unlimited legal tender. Copper is not named in |;he Constitution. OUR MONEY WARS. 39 CHAPTER VI. 1806 to 1816. Foreign Coins. — The Act of April 10, 1806, renewed the legality of foreign coins, changing the value of manj'of them. These laws show that law makes and unmakes money. These gold and silver coins were money, in the United States, at the values fixed by law; and they differed in value under the different laws, showing the control of law over them. Wild-cat Banks. — By this time wild-cat State banks were in full bloom. In March, 1809, a legislative committee of the State of Rhode Island made an examination into the affair.s of the F'armers' Exchange Bank of Gloucester ; and it was found that the bank had $580,000 of its notes in circulation, and only $86.16 in its vaults for their redemption. Before the end of the year, a general suspension of the banks of New England took place. It was discovered that nearly all were in the same condition, — no specie, and nothing to show but worth- less notes of speculators. Fluctuation of Gold in England. — Currency matters of Europe become now of immense interest, in connection with the Napoleonic wars, \^'orshipers of gold, " the in- variable unit," are invited to consider the following state- ment of its variations from 1810 to 1820 in gold-worshiping England : — The act known as the Peel Act of 1844 made gold receiv- able at the Bank of England at the rate of £2, 17s, lo^d. per ounce of pure metal. Doubleday's Financial History of England, p. 277, has the following statement of the fluctu- ations of gold in that country, for the ten years from 18 10 to 1820, compared with the present standard price, by the Peel Act of 1844. 40 OUR MONEY WARS. 1816 £1 i8s. 6d. 1817 4 OS. od. 1818 4 IS. 5d. 1819 4 3s. od. 1820 3 i7s.io|-d. 1810 £if 5s. od. 1811 4 17s. id. 1812 5 8s. od. 1813 5 los. od. 1814 5 IS. od. 1815 4 I2S. gd. 1811. State Banks.- — In this year, our State banks (that are always ready in their seraphic wisdom and cherubic un- selfishness to furnish us just what currency is " needed," according to certain " laws of nature," known only to them) were spreading themselves again. That terrible hard hitter, Bryant of Boston, in his book on " Money," gives them this rap :— Some who are ignorant and many who are knaves assert that the law of " supply and demand " is the true and adequate governor of this question. That the assertion is absolute nonsense is shown by the following actual facts of our financial history. In 181 1 the, volume of money issued and circulated, by the old system of State banks, was $28,000- 000. In 1816 it had risen to $110,000,000; in 1818 it had fallen to $40,000,000 ; in 1832 it stood at $60,000,000 ; in 1837 it reached $150,000,000 ; in 1843 '^ had sunk to $58,000,000; in 1847 it was $105,000,000 ; i"^ 1^57 $215,000,- 000; in 1858 it had fallen to $150,000,000; in 1865, the legal tender and bank note circulation was $1,199,565,231 among 27,000,000 people (rebel States excluded) ; and in 1875 was $700,000,000 among 45,000,000 people, \^'hen we look at these figures, and see how the volume of our money, under the law of " supply and demand," has bobbed up and down, and then consider that it is the inevitable law that values must, of necessity, swell and sink, just as the volume of dollars rises or sinks ; and then call to mind the widespread ruin and bankruptcy in which the country was thereby plunged ; — is it not evident that no one but an idiot can have anything further to say about the law of supply and demand ? 1812. When the war with England began, the State banks were, of course, less reliable than ever. The first Bank of the OUR MONEY WARS. 41 United States went out of existence in 18 11, Congress re- fusing to grant it a new charter. Many State banks were establislied during the life of this national banli, and hun- dreds grew up all over the country soon after the re-charter of this bank was refused. The notes of the State banks were then the principal money of the United States. These banks attempted to supply the money to carry on the war, agreeing to take in exchange for their notes 6 per cent, bonds of the United States at 75 and 80 cents on the dollar. The banks then professed to pay coin. To some extent the Government received money from the banks upon these con- ditions ; but through the influence of Mr. Jefferson, then in private life, the Government was induced to issue Treasury notes, which bore interest, but were receivable for all debts due the United States. The misfortune with most of those Treasury notes was that they were issued in sums too large to use as money. The consequence was, the acts authorized the Government to sell these Treasury notes to banks, and to have the amount thereof placed to the credit of the United States, to be paid to the Government in the notes of the banks. The banks, therefore, as a general rule, held the Treasury notes and received the interest, while the Treasury held and paid out the bank notes. This act was against the people. Interest-bearing Treasury Notes. — The Act of June 3, 1812, authorized the issue of $5,000,000 Treasury notes, to run one year, bearing 5 and 2-5th, per cent, interest. They were made receivable for all debts due the Government, and were to be paid to such public creditors, and other persons, as were willing to receive them. They might also be used to procure loans ; or might be placed to the credit of the Treasury, in banks, at par and accrued interest. The Act of June 30, 1812, provided that the moneys of the Government might be deposited ijn State banks ; and they were so deposited. The banks then professed to pay coin — a profession which was a false pretense. From 1812 to 1816 business was sustained by legal tender Treasury notes, that were not a tender to the people. Judga Warwick Martin, speaking of notes that are a legal tender to the Government, but not to the people, shows the absurdity of this, once for all, as follows : " Unless a part is 42 OUR MONEY WARS. greater than the whole, what is a tender to the whole people, as embodied in the Government, should be a tender to in- dividuals." From 1812 to 1862, when the exception was put in the legal tender act, Treasury notes were received the same as gold and silver, at our custom-houses. Those of 1812, '13, '14, '15. '37' '38, .'39. '40, '41, '42, '43. '45' '46, '47> '48, 'S7 and '60 were so received. 1813. It was in this year that Jefferson, writing to Epps, defended Continental money and Treasury notes. See 1776. The Act of Feb. 25, 1813, authorized the issue of 10,000,- 000 in Treasury notes, similar to those under the Act of June 3, 1812. 1814. Jefferson DiSGtJSTED. — On January 16, 1814, previous to the crisis of that year, Jefferson wrote as follows : " Everything predicted by the enemies of the banks in the beginning is now coming to pass. We are to be ruined by the deluge of bank paper, as we were formerly by the old Continental paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious advent- urers, who, instead of employing their capital — if any they have — in manufacture, commerce, and other useful pursuits, make it an instrument to burden all the exchanges of prop- erty with their swindling profits, — profits which are the price of no industry of theirs. * * * And what have we purchased by this tax of $200,000,000, which we are to pay by whole- sale, but usury, swindling, and new forms of demoralization.'' Suspension of the Banks. — In the early part of 1814, the banks being called upon for further loans to the Govern- ment declined to make them unless permitted to suspend specie payments. To the disgrace of the United States, these cortditions were submitted to. The banks suspended. The Treasury was soon filled with suspended bank paper, while the banks were filled with Treasury notes. The latter were as good as coin. The former were nearly worthless. This condition of things caused a great demand among bondholders and capitalists for a bank of the United States. Jefferson and those agreeing with him insisted that instead OUR MONEY WARS. 43 of chartering a new bank the Government should issue Treasury notes, as the permanent money of the country, and should ignore all banks. The Act of March 4, 1814, authorized $10,000,000 in Treasury notes, similar to those of 1812 and 1813. No charge was to be made to the Government by the banks which credited these notes. The Act of March 14, 1814, authorized the placing of Treasury notes, to the credit of the Government in State banks, at their face and accrued interest ; though the banks were then suspended. An Original Greenbacker. — Many beside Jefferson al- ready began to see the true light. On November 12, 1814, Mr. Hall, of Georgia, introduced into the House of Representatives the following : i Re- solved, That the Committee of Ways and Means be directed to inquire into the expediency of authorizing the Secretary of the Treasury to issue notes convenient for circulation, to the amount of million of dollars, under such checks as may be thought best calculated to prevent counterfeits ; in which alone, and gold and silver, shall be paid all taxes, duties, imports, or debts due, or which hereafter may be- come due to the United States. 2. Resolved, That the Treasury notes which may be issued as aforesaid shall be a legal tetider in all debts due, or which may hereafter become due, between a citizen of the United States and a citizen or subject of any foreign State or kingdom. Two more follow, which provide for the funding after twelve months, and redeeming in coin. This system was discarded because it was thought to be too expensive ; and a National Bank, with a capital of §35,000,000 estabUshed, with what results everybody knows. Legal Tender to Govern.ment. — The Act of December 26, 1814, authorized the issue of §25,000,000 in Treasury notes, in place of a loan of that amount previously author- ized. Ten millions of these notes were to be applied to the payment of ten millions previously borrowed. The notes were to run one year, and were to bear live 2-5ths interest. They were made legal-tender for all obligations to the Government, and to be otherwise like those previously is- sued. 44 OUR MONEY WARS. How Banks are Created. — Notwithstanding the con- stitutional prohibition against emitting bills of credit, charters incorporating private institutions authorized to emit bills of credit (bank notes) were granted by the Legislatures of the several States in large numbers ; in utter disregard of the Constitution, as well as of the public good. In Penn- sylvania, for example, 25 charters, incorporating specie basis banks of issue, were granted during the session of 1813; but were vetoed by the Governor. At the next session of the Legislature, in 18 14, a bill was passed, over the veto of the Governor, chartering 41 banks, with a capital of $17,- 000,000 : 37 of them went into operation at once, and six months afterward suspended specie payment. The manner of obtaining a charter was very simple. A petition setting forth " the wants of the people," in the locality where the bank was to be established, was all that was required ; political influence and intrigue accomplished the rest. 1815. A Fight Against Treasury Notes. — The Act of Feb- ruary 14,1815, authorized the issue of $25,000,000 Treasury notes, in addition to other issues. Up to this time, the Secretaries of the Treasury', Mr. Gallatin and Mr. Crawford, had complained that the Treasury notes, so far issued, were made too large for common circulation, though their stand- ing among the people was good; and the people were de- sirous of having them. They say Treasury notes had taken the place of coin, and equalized the exchange throughout the country. To meet the wishes of these Secretaries and of Jefferson and Madison, as well as of the people, these $25,000,000 Treasury notes for circulation were authorized and issued. The most of them-were required to be less than $100 in denomination, and to be payable to bearer; while those of $100 and over were to be made payable to order and to pass by indorsement, and were to bear five 2-5ths in- terest ; but the smaller ones were to bear no interest. They were also, for the first time, made receivable for six per cent, interest bonds. They were made to circulate as money and to have the characteristics of coins, but they were not re- deemable therein. This was the first time the United States ever issued such Treasury money. In addition to being convertible into bonds, it was made legal tender for all OUR MONEY WARS. 45 debts due the United States. The interest notes were con- vertible into bonds also. The banks had suspended before this act was passed. It, therefore, provides that if any of the interest-bearing Treasury notes were sold to banks and credited to the Treasury, the credits must be in coin. Upon these terms the banks did not want them. These notes, after being paid into the Treasury, were to be reissued. All notes previously issued were, under the laws creating them, to be canceled, after being received in the Treasury. They were not to be paid out again. But these notes, made specially to circulate as money, were to be paid out to all who were willing to receive them,' which included all the people. One peculiarity in all the Treasury notes issued in 1812, 1813, 1814, and 1815, was that although the Government was compelled to receive them for' all dues and demands, the people were not compelled under the laws to receive them. The laws made it optional with them whether to re- ceive them or not. But that the people preferred them to bank notes is proved by the fact that, though not compelled by law to receive them, they did gladly receive and hold them. But so long as Treasury notes of the Government bore in- terest and were receivable for all debts due the United States, and were sold to the banks, and payment therefor made in bank notes, both before and after the suspension, the banks and bankers were very well satisfied with them. The banks had the most of these Treasury notes and were making the interest, while the Government and the jfeople were compelled to receive the bank notes, and to use them. The Treasury notes were actually better than coin. The bank notes proved to be almost worthless. But when these ^^25, 000,000 Treasury notes of small denominations were made to circulate as money and to bear no interest, the in- dignation of all the banks in the country was aroused. They saw that if these notes went out among the people, and be- came the money of the country, there would be an end to the circulation of bank notes. Such was the truth. There was, therefore, a general combination in New England, New York, Delaware and Pennsylvania, to kill off these Treasury notes which bore no interest. The old Bank of the United States, chartered in lygi, the charter of which expired and 46 OUR MONEY WARS. was not renewed in 1811, was then, as the law allowed, clos- ing up its affairs. The debts of the people to this bank were very large. The Bank was pressing for payment. The people presented these Treasury notes which did not bear interest in payment. The Bank, to destroy the credit of the notes, and to force the recharter of a National bank, refused to receive the notes of the Government in payments to the Bank. As the Bank would not receive the notes from the merchants, the merchants were, reluctant!)', compelled to refuse to receive them for debts due them and for goods sold. The New England banks and those in Delaware were, also, as deeply involved in this conspiracy to destroy the credit of these Treasury notes as they are now. The em- bargo and non-intercourse laws of Jefferson and Madison had destroyed the carrying-trade of New England, and had caused a suspension of the New England banks in 1809 and 1810. The people of New England were, therefore, greatly opposed to the war with England. They did all they could to cripple the Government in carrying it on. They refused all loans, even of bank notes, and were very hostile to all Treasury notes, especially to those intended to take the place of bank notes, as those of 18 15 were. By a general combination between State banks, the old National Bank, bondholders, and bullion brokers, these notes of the United States were forced to a disco,unt for a short time. One of the strongest arguments in favor of having all Treasury notes made full legal tender is here presented. Had they been legal tender to the people, as well as to the Government, all the efforts of the Isanks and brokers to re- ject them, and reduce their value, would have been fruitless. If the legal character were removed from the present notes, the National banks would at once discredit them. Immediately after these efforts of the banks to discredit Treasury notes, an application was made to Congress for a charter of a national bank, which proposed to take from the Government, as part of its capital, $15,000,000 of these same Treasury notes, to withdraw them from competition with bank notes. Mr. Madison vetoed the bill, principally on account of this provision. But $28,000,000 of bonds were substituted for Treasury notes, as capital of the Bank ; and by a combina- tion of the Federal party and a few Democrats, the Bank OUR MONEY WARS. 47 was chartered. The charter provided that no other such bank should be chartered by Congress for 20 years. This implied, also, that all Treasury notes intended to circulate as money should be withdrawn, and that this Bank should furnish all the national paper circulation for 20 years. For this privilege the Bank paid $1,500,000. This contract, on the part of the Government, was disgraceful ; but having been made, it had to be carried out ; and it was carried out. An Old Story. — The Act of February 25, i8i5,gave that same old authority to the Secretary of the Treasury as to selling Treasury notes to State banks, and having the proceeds placed to his credit therein. When the banks suspended in 1814, they were well supplied with Treasury notes, and the Treasury was well filled with bank notes. The former were good beyond doubt : the latter were very doubtful, and proved mostly worthless in the end. Madison on Treasury Notes. — In his message of Decem- ber 5, 1815, President Madison said, speaking of the need of a stable and sufficient currency : " If the operation of the State banks cannot produce this result, the proper operation of a National bank will merit consideration ; and if neither of these expedients is deemed effectual, it may be necessary to ascertain the terms upon which the notes of the Govern- ment (no longer required as an instrument of credit) shall be issued, vpon motives of general policy, as a common mcdiiiin." In 1815, Jefferson gave the following statement of the num- ber of banks which had been established up to that time : " In 1781 we had i bank, capital % 1,000,000 " i3,So°.°°o " 18,642,000 " 20,472,000 " 29,112,000 " not known And at this time (1815) we have probably 100 banks.'' Paper Money Broke the Power of the First Napoleon AT Leipsic. — Waterloo, in 18 15, could not be reached by coin. According to Sir Archibald Alison, the historian, "By a decree on September 30, 1813, from Peterswalden, in Germany, the allied sovereigns issued paper notes, which soon passed as cash from Kamschatka to the Rhine ; and I79I 6 1794 ' 17 1796 ' 24 1803 ' 34 1804 ' 66 48 OUR MONEY WARS. produced the currency which brought the war to a successful termination." Before Geo. S. Coe, the Professor Sumner of Wall Street, writes that proposed book on Finance, he had better r.ead up on the history of Europe. Poor, the railroad statistician, who has written a big book upon money and dedicated it to Coe, quotes him. at p. 551 as making the following misstate- ment : " The capital of the New York banks thus associated [in 1862] made an aggregate of 120 millions, an amount greater than the Bank of England and the Bank of France combined : each of whose institutions had been found suffi- cient for the gigantic struggle of those great nations, from time to time, in conflict with all Europe." OUJi MONEY WARS. 49 CHAPTER VII. 1816 to 1826. 1816. The Second United States Bank. — The Act of April 10, 1816, chartered the segond Bank of the United States, with a capital of J35, 000,000 composed of $21,000,- 000 United States bonds, and $7,000,000 coin and bank notes. The Government made up the balance by taking $7,000,000 of the stock ; and had five directors in the institu- tion. The notes of the Bank were made legal tender for all dues to the United States. The charter extended 20 years. The Bank, as was said, paid $1,500,000 for its charter. Our modern National banks don't see things in that way. This bank had some Democrat backing ; but none from Jefferson and Madison. Currency Theories. — Dallas, Secretary of the Treasury, in his report in 18 16, says, " Whenever the emergency occurs that demands a change of system, it seems necessarily to follow that the authority which was alone competent to establish the national coin, is alone competent to create a national substitute." President Madison said, in his Message of December 3, 1816, "For the interests of the community at large, as well as for the purposes of the Treasury, it is. essential that the nation should possess a currency of equal value, credit, and use, wherever it may circulate. The Constitution has intrusted Congress exclusively with the power of creating and regulat- ing a currency of that description." Foreign Coins. — The Act of February 20, i8i6, renews the value of foreign coins, for three years again, as it is found impossible to run them through the mint in spite of their " intrinsic value. " It is strange that Congress was con- stantly changing the value of these coins ; and limiting the time in which they should be money. If gold and silver were the best money, and depended not upon law but upon 4 JO OUR MONEY WARS. weight for their value, wliy all these laws changing their money value ? 1817. Testing Treasury Notes. — As the Bank of the United States had purchased of the Government, for $1,500,000, the monopoly of making legal-tender paper money for twenty years ; and as many of the Treasury notes of 1813, 1814 and 1815 still remained in the hands of the people, the Bank claimed that the permitting of said Treasury notes to remain out was a violation of contract on the part" of the United States : and Congress, in obedience to the wishes of the Bank, in 1817, called in all of said notes, providing that they should not be received at any place but in the Treasury. But the people knew that Congress possessed no such power as they had attempted to exercise. They, therefore, held on to the Treasury notes, as they now do to legal- tender notes. In 1818, a firm in Boston tendered said Treasury notes in paynjent for duties on imports, for which they had previously been received. The banks in Boston then had, as they now have, a deadly hostility to all paper money issued by the Government. The district attoi-ney in Boston was glad of the opportunity, which the law gave him, to instruct the col- lector of the port not to receive Treasury notes for duties. They were, therefore, refused at the custom-house. The Government brought suit for the duties. The merchant pleaded a tender of payment in Treasury notes. The Government responded that Treasury notes were not legal tender. The case was heard by Judge Story, in 18 19. His review of the case occupies eighteen pages. He gave judgment for the defendants. His decision is that " Treasury notes were and are legal tender for everything for which the law makes them receivable." (2 Mason, pp. i to 18.) The Government had made these notes receivable for all debts due the United States. The Government could not, therefore, go back on its own contract. The result of this decision was to keep the Treasury notes in the hands of the people, the Bank to the contrary notwithstanding. Congress endured the censure of the Bank until 1822, when, upon the 3d of May of that year, they passed another OUR MONEY WARS. SI act to discredit Treasury notes ; so that the people might be compelled to surrender them ; which they did not wish to do. 1818. A legislative committee of the State of New York made the following report in 1818 : " Of all aristocracies none more completely enslaves a people than that of money; and, in the opinion of your committee, no system was ever better devised to perfectly enslave a community than that of the present mode of conducting banking establishments. Like the siren of the fable, they entice to destroy. They hold the purse-strings of society ; and by monopolizing the whole of the circulating medium of the country, they form a precarious standard by which all property in the country — houses, lands, debts and credits, personal and real estate of all descriptions — are valued." 1819. Legal Tender Discussions. — Judge Story declared the Treasury notes legal tender. Sumner, of Yale, says that this decision was as great an outrage as the Dred Scott decision. See 1817. 1820. Wm. H. Crawford, Secretary of the Treasury, in his re- port, February, 1820, said: "All intelligent writers on cur- rency agree that when the currency is decreasing in amount, poverty and misery must prevail." The Act of May 15, 1820, and the Act of March 3, 1821, repealed the law prohibiting the Bank of the United States (private) from loaning the Government sums over $100,000 ; and authorized the Secretary of the Treasury to borrow of said bank $8,000,000 at five per cent. Peel's Resumption. — In 1820 came Peel's Resumption of Specie in England, after 25 years without coin payments. The elder Peel had built up the family by cotton spinning, and was a wise, practical old man. When his son performed his " great and only " Resumption Act, the father said, " My son, you have enriched your family and your class, but you have nearly ruined your country." Ricardo, the Jew banker and economist, was largely responsible for this terrible deed. When specie was only five per cent, premium, he argued that 52 OUR MONEY WARS. a forced specie resumption would cause only a five per cent, reduction of values, while Sir William Heygate contended that it would be at least five times as much. Events proved that Sir William was right, and Ricardo frankly confessed as much when he said (See " Duncan's History of the Bank Charter," p. i lo) : " Ay, Heygate, you and the few others who opposed us on cash [specie] payments have proved right. I said the difference would be only five per cent, and you said at the least it would be 25 per cent." And yet, our college professors and other so-called teach- ers of political economy continue to peddle out, in the inter- est of the usurer, the discarded theories of Ricardo and other mischievous sophists, as scientific truths ; while care- fully suppressing — also in the interest of the usurer — their disavowal and denial of the same. One consequence of this was seen in the fact that our American financial quacks made the same false statement when our Greenbacks had nearly reached parity with gold ; and their persistence in Re- sumption produced the same awful effects. This same Ricardo, in one of his " lucid intervals," uttered the following, to the shame and confusion of all our Sumners and Shermans : " A regulated paper currency is so great an improvement in commerce that I should greatly regret if prejudice should induce us to return to a system of less util- ity. The introduction of the precious metals for the pur- poses of money may, with truth, be considered as one of the most important steps toward the improvement of commerce and the arts of civilized life. But it is no less true that, with the advancement of knowledge and science, we discover that it would be another improveme?it to banish them again from the employment to which, during the less enlightened period, they had been so advantageously applied." A word more from Sumner's description, of Peel's Resump- tion, before I give the real facts from Sir A. Alison, Double- day and Miss Martineau. He says of the debates before the bill was passed, that it was opposed by " the practical bank- ers and city men, and the great mass, who did not understand the matter. * * * The city inen had a theory of their facts. It was really one theory against another ; the one drawn from a narrow routine [business experience, S. L.], the other a jdiilosophical and seicntific generalization, from a broad range of facts." O Lord, how long ? OUR MONEY WARS. 53 Here are the facts. During the wars with Napoleon, and after they were over, for nearly 20 years, the Bank of Eng- land suspended specie payments. But in 18 19, after four years of peace, the value of paper currency rose to be only six per cent, below coin. Peel and Ricardo urged upon Par- liament resumption in four years. They said, as some said here, in 1875 : " We are almost at the point of resumption ; we have already discounted our sufferings. It is only a question of three per cent." Ricardo said : " The whole dif- ficulty would be in raising the value of the currency three per cent." Though wise business men protested, though the Governor and directors of the Bank of England warned Parliament of the danger of contracting the currency — as they must be compelled to, do to resume in four years — such was the influ- ence of Peel and Ricardo, that they carried " Peel's Resump- tion Act " through the House of Commons by a unanimous vote. But one man stood out against it ; and they even per- suaded him to leave the chamber when the vote was taken, so that it would appear unanimous. Sir Archibald Alison, in his history, tells the sad story of the result : " The effect of this extraordinary piece of legis- lation was soon apparent. The industry of the nation was speedily congealed, as a flowing stream is by the severity of an Arctic winter. * * * The entire circulation of Eng- land fell from $232,545,000 in 1818 to $142,757,000 in 1821. The effects of this sudden and prodigious contraction of the currency were soon apparent ; and they rendered the next three years a period of ceaseless distress and suffering in the British Islands." The discounts in the Bank of England, — which in 1810 had been $115,000,000, and in 1815 not less than $103,000,000, — sank, in 1820, to $23,360,000, and in 1821 to $13,610,000. The effect upon prices was not less immediate and appalling. The rate of wages fell one-half. " From the tremendous reduction in the price of land," says Doubleday, " which now took place, the estates barely sold for as much as would pay off the mortgages ; and the owners were stripped of all, and made beggars." Resumption in England is thus described in Doubleday's History : — We have already seen the fall in prices pro- duced by the immense narrowing of paper circulation. The distress, ruin and bankruptcy which now took place 54 OUR MONEY WARS. were universal, — affecting the great interests both of land and trade ; iDut especially among land-owners, — whose estates were burdened by mortgages, settlements, legacies, etc., — the effects were most marked, and out of the ordinary course. Before the close of the year 1819, the distress became insufferable. Great meetings were held throughout England and Scotland, during the summer. In August, 60,000 peo- ple, — men, women and children, — assembled near Man- chester. A collision occurred between the people and the troops, in which a number were killed and many wounded. This created intense excitement, and the meetings of the people, held in Liverpool, York, Leeds, and various other cities, were attended by vast multitudes of suffering people, demanding vengeance. Serious riots occurred, which were only quelled by military force. In 1820, a conspiracy was discovered, which had for its object the murder of all the King's ministers ; and which was only frustrated through the cowardice of one of the conspirators, who betrayed his associates. Military training went on among the people, and the Government was obliged to provide a large military force, to prevent an outbreak. "On Sunday morning," says Alison, "a treasonable proclamation was found placarded all over the streets of Glasgow, Paisley, Stirling and the neighboring towns and villages : in the name of a provisional government calling on the people to desist from labor ; on all manufacturers to close their workshops ; and on all the friends of their country to come forward and effect a revolution by force, with a view to the establishment of an entire equality of civil rights. Strange to say, this proclamation — unsigned and proceed- ing from an unknown authority — was widely obeyed. Work immediately ceased ; the manufactories closed from the desertion of workmen ; the streets were filled with anxious crowds, eagerly expecting news from the South. The sounds of industry were no longer heard ; and 200,000 per- sons, in the busiest districts of the country, were thrown into a state of compulsory idleness, by the mandates of an unseen and unknown power." 5,000 troops were immediately assembled at Glasgow, and the insurgents were overawed. Before the end of the year, the Government had increased its volunteer force to 35, 000 men. "Without doubt," says Alison, "this power- OUR MONEY WARS. 55 ful volunteer force, organized especially in the manufactur- ing districts, at this period, — and the decisive demonstration is afforded of moral and physical strength on the part of the Government, — was the chief cause through which Great Britain escaped an alarming convulsion." The preparatory steps taken for this consolidation of the money power — which were attended with almost incon- ceivable horrors — are thus delineated by Miss Harriet Martineau : " It is not he who sees from afar the clouds of dust from an earthquake, and who faintly hears the mur- murs of confused sounds, — and who knows that so many churches and so many dwellings, and even so many people, have perished, — that can feel the deepest horror of the scene. It is rather he, who, in some narrow street, meets the spectacle of the writhing of a crushed sufferer here, a child- less mother there, a surviving lover, a forlorn infant, wailing among the ruins and flames, who has the best understand- ing of what has befallen. And so it was with this social convulsion in England. There are some, now, of the most comfortable middle-class order, who cannot think of that year without bitter pain. They saw many parents grow white- haired in a week's time ; lovers parted on the eve of mar- riage ; light-hearted girls sent forth from the shelter of home, to learn to endure the destiny of the governess or the seam- stress ; governesses too old for a new station, going actually into the vi^orkhouse ; rural gentry quitting their lands, and whole families relinquishing every prospect in life, and standing as bare under the storm as Lear and his strange comrades on the heath. They saw something even worse than all this. They saw the ties of family honor and har- mony snapped by the strain of cupidity at first, and dis- content afterward, and the members falling off from one another as enemies. They saw the hope of the innocent, the faith of the pious, the charity of the generous, the integrity of the trusted, give way. They saw the most guilty re- warded, and the most virtuous involved as deeply as any in the retribution. But it would be an endless task to adduce the sorrows of that time ; nor can their issue ever be recog- nized. Still, the depression did pass away. Our ships were, once more, abroad upon the sea ; and the clack of the loom and the roar of the forge were again heard in our towns. 56 OUR MONEY WARS. But the heart-wounds of such a time can no more be healed than the whitened hair can resume its color." A Parallel. — The following description of the condition in the United States in 1820, reminds one of the way in which specie was resumed in 1879, at the corner of Wall and Nassau Streets, only, in sums of $50 and upward. In the South the banks still pretended to pay specie. But this account of the way in which they did business in some locali- ties would hardly justify the pretension. Here is the style. It was first started at Darien, Ga. " One who presented a bill had to make oath, in the bank, that the bill was his own, and that he was not an agent for any one. He was re- quired to make this oath before the cashier andyfz/^ directors ! and had to pay ^i-sy-J- expenses on each bill." 1822. Act of May 3, 1822, tries again to call in Treasury notes. See 1817. OUR MONEY WARS. 57 CHAPTER VIII. 1826 to 1836. 1828. The Steady Currency of France. — As early as 1828, the steadiness of French money was being noticed in Eng- land. Huskisson said: " If they wish to prove, the value of a steady and unchangeable currency they had it in the his- tory of France ; that country had been twice invaded by a foreign army, her capital had been twice taken possession of, and she was obliged to pay large sums to foreign countries ; but they had a steady metallic currency ; and however situa- tions might have affected the rest, — however the extensive contractor might have been injured or ruined, — the body of the population remained unoppressed. This was attributed to the permanent footing upon which the currency of the country had been established." Huskisson did not see that it was abundance of Govern- ment money, and doing business with money instead of checks and notes, that kept the French safe. 1829. Gen. Jackson takes Hold. — There is a curious lack of Governmental financial events and Congressional acts about money from 1820 to the time when President Jackson's strong hand gets hold. The United States Bank has mean- while had its own way — a pretty aristocratic way for a private corporation. In his Message of December 8, 1829, President Jackson alleged that the United States Bank had failed to furnish a sound and uniform currency ; and he proposes that the Treasury shall do what the Bank has failed to do. . He says : " The charter of the Bank of the United States expires in 1836 ; and its stockholders will, most probably, apply for a renewal of their privileges. In order to avoid the evils re- sulting from precipitancy in a measure involving such impor- tant principles and such deep pecuniary interest, I feel that 58 OUR MONEY WARS. I cannot, in justice to the parties interested, too soon present it to the deliberation of the Legislature and the people. Both the constitutionality and the expediency of the law creating this bank are well questioned by a large portion of our fellow-citizens. And it must be admitted by all, that it has failed in the great end of establishing a uniform and sound currency. Under these circumstances, if such an institution is deemed essential to the fiscal operations of the Govern- ment, I submit to the wisdom of the Legislature, whether a National one, founded upon the credit of the Govern- ment AND ITS kevenues, might not be devised ; which would avoid all constitutional difficulties, and at the same time secure all the advantages to the Government and country that were expected to result from the present Bank." 1832. Instead of rechartering the Bank in 1829, 1830, 183 1 and 1832, General Jackson insisted upon the Government issuing its own money, making its own exchanges, and keeping its own deposits. But the weakness of Congress was again apparent, when, contending with the money power. They surrendered to that power, and rechartered the National Bank in 1832. Jackson vetoed the bill, and a two-thirds vote could not be obtained to pass it over the veto. Here was a good opportunity to carry out the plans of Jefferson and Madison, which had been defeated by the banks in 1816. General Jackson used all his great power to induce Con- gress to have the money of the nation based upon the reve- nues and credit of the nation ; but the bank power controlled Congress, and they would not listen to his advice or adopt his measures in favor of a national currency, issued by the nation, expecting to force him to sign a United States Bank bill. But Jackson was not the man to be forced. He re- mained firm. The Bank had four years to operate, after the veto, before its charter expired. The Government was to pay off the national debt and have some §40,000,000 surplus money on hand, which was in the Bank of the United States. The Bank, immediately after the veto, commenced issuing its own money and that of the Government to subsidize the press, to control the election of President, then about to take OUR MONEY WARS. 59 place, so as to insure a renewal of its privileges for twenty )'ears. To permit money of the Government to be thus used would have been treason to the United States. This was something of which Andrew Jackson could not be guilty. There was but one way to prevent it, which was the removal of the deposits from said Bank. No one but the Secretary of the Treasury could do this. Mr. Duane, then Secretary, was ordered to do it, but he refused. He was at once re- moved, and Mr. Taney was appointed in his place. He removed the deposits., Oct. i, 1833. When the U. S. Bank sought a recharter. Old Hickory was firm, unyielding and uncompromising. He gathered his little Democratic band around him ; and when the second campaign opened he sent them out to educate and save the people — according to his best light. He made no conces- sions and formed no coalitions with either of the old parties. Benton, in his " Thirty Years in Congress," said that the Bank spent ^3,000,000 in bribing and subsidizing members of Congress, newspaper editors, politicians, brokers, jobbers and men of influence, to defeat Jackson, and purchase a re- charter. But justice and Jackson prevailed : the Bank power was destroyed. Jackson's Veto Message, July 10, 1832. — It is main- tained by some that the Bank is a means of executing the constitutional power "to coin money and regulate the value thereof." Congress have established a mint to coin money, and passed laws to regulate the value thereof. The money so coined, with its value so regulated, and such foreign coins as Congress may adopt, are the only currency known to the Constitution. But if they have other power to regulate the currency, it was conferred to be exercised by themselves, and not to be transferred to a corporation. If the Bank be established for that purpose, with a charter unalterable with- out its consent. Congress have parted with their power for a term of years, during which the Constitution is a dead letter. It is neither necessary nor proper to transfer its legislative powers to such a banic, and therefore unconstitutional. * * * Unauthorized by the Constitution, subversive of the rights of the States and dangerous to the liberties of the people * * * when the laws undertake to grant gratuities and ex- clusive privileges to make the rich richer and the potent 6o OUR MONEY WARS. more powerful, the humbler members of society, — the farm- ers, mechanics and laborers, who have neither the time nor the means of securing like favors for themselves, — have a right to complain of the injustice of the Government. 1833. Jackson's Message, Dec. 3, 1833. — It being thus estab- lished by unquestionable proof, that the Bank of the United States was converted into a permanent electioneering engine, it appeared to me that the path of duty, which the Executive Department of the Government ought to pursue was not doubtful. As by the terms of the Bank charter, no officer but the Secretary of the Treasury could remove the deposits, it seemed to me that this authority ought to be at once exert- ed, to deprive that great corporation of the support and counte- nance of the Government, in such a use of its funds and such an exertion of its powers. In this point of the case, the question is distinctly presented, whether the people of the United States are to govern through representatives chosen by their unbiased suffrages, or whether the power and money of a great corporation are to be secretly exerted to influence their judgment and control their decisions. It must now be determined whether the Bank is to have its candidates for all offices in the country, — from the highest to the lowest, — or whether candidates on both sides of political questions shall be brought forward, as heretofore, and supported by the usual means. The Act of April i i, 1833, provided that the Bank of the United States should no longer act as the Commissioner of Loans for the United States, the President having vetoed its recharter. A commissioner of loans was no longer needed ; as the United States did not wish to make any loans — the debt being nearly paid off. 1834. The Act of June 25, 1834, makes the silver dollar of Mexico, Peru, Brazil and Central America lawful money of the United States. They remained such until 1857. They were not money in the United States until made such by law. The Change of Ratio. — In 1834, came our change of ratio between silver and gold. Judge Warwick Martin, writ- ing in 1880, said : — OUR MONEY WARS. 6 1 TRe legal relation between silver and gold in Great Britain, France, and other European countries is to-day 15^ pounds of silver to i of gold. This is still the legal relation in England. Notwithstanding this and the fact that $75,- 000,000 of the reserves of the Bank of England are in silver, this bank has [1880] forced the discount on silver to 15 per cent., and makes large amounts of money out of it. England wishes the United States to agree to this discount so that the bondholders will not be compelled to receive silver in payment for their bonds, and that the Bank may continue to make 21 per cent, upon silver purchased by the Bank. But v/hat is the situation of the United States in connection with this matter ? From 1792 until 1834, the relation created by law between silver and gold in the United States was i pound of gold to 15 pounds of silver. The English took advantage of this and purchased all our gold, paying 15 pounds of silver for i pound of gold ; and thus making one- half pound of silver by every pound of gold thus purchased from us. We then made our coin ii-i2fine. Our bonds were, up to 1834, yet unpaid, and they were payable in coin at this standard fineness. The fineness could not therefore be changed by law at that time. Our honesty and regard for the national credit compelled us to permit England to depredate upon us until our debt was paid. In June, 1834, every dollar of the money owing by the United States was placed in bank, in the money for which the bonds called, to pay them on presentation. \\'e were then out of debt. The time had come when we could, in justice to all, change the relation between silver and gold and the standard fineness of both. On the 28th of June, 1834, the act was passed changing the relation of silver and gold and making the legal relation 16 pounds of silver to i of gold, and the standard fineness 9-10 instead of 11- 12, as it had been. This was the only time in our history when we could have made these changes, owing to previous debts. It is to be greatly regretted that 153^ to I had not been adopted instead of 16 to i. But the English did not neglect the opportunity which this law gave to depredate upon us. They had, under our old law, taken away nearly all our gold and given us nearly all their silver. They were able, after the law of 1834, to purchase nearly all our silver, and to pay for it in gold, i pound of 62 OUR MONEY WARS. gold for i6 pounds of silver — thus making one-half pound of silver upon every pound of gold they sold us It will be seen, therefore, that unless nations can agree upon the same unit of value and of the money of account, and upon the legal relation which gold and silver shall sus- tain to each other, and also upon a common standard of fineness, they never can have international metallic money. Upon these three things they never can agree. An agree- ment among nations to adopt such a coinage, would make it necessary to recoin and change all the coins of the world. This will never be done. But there is no necessity for anything of the kind. As nations do not pay debts to each other in money, but in commodities, it matters not to one nation what the money of another nation is. As we have no money of the world, and can have no international money, we beg our statesmen to permit us to attend to our business instead of to the business of other nations. We want money for the United States, not for other nations. Let our money be made by Congress of that which costs us least, and will best answer the business demands of the country. [It is about time that honest rustic, Uncle Sam, stopped allowing England — the bunco-steerer of the world — to play him for a flat. — L. S.] Here is a technical description of the law of June 28, 1834 ; showing its effect on the relations of gold and silver: The United States were out of debt. They had in bank the money to pay off every obligation. They could, therefore, without being charged with bad faith, change the standard fineness of their coins ; which they then did. This act changed the relation between silver and gold from 15 to i to 16 to I, and the standard fineness of gold from 11-12 to 9-10. This made 25.8 grains gold, g-io fine, correspond with the silver dollar of 371^ grains pure silver, instead of 27 grains 11-12 fine, as under the law of 1792. The gold dollar did not exist under either of these laws ; but 27 grains gold, under the former law, and 25.8 grains, under the latter, were made the value of a dollar. The so-called gold dollar of 1792 contained 24.75 grains pure gold, and under the acts of 1834 and 1837, 23.22 grains pure gold, a difference of 1.53 grains in the dollar. The law of 1792 made a pound of gold OUR MONEY WARS. 63 worth 15 pounds of silver. The law of 1834 makes a pound of gold worth 16 pounds of silver. There is i^ per cent, difference in the metallic values of gold coins, of the same denomination, under these two laws. Their legal or money value is the same under both laws — being $2.50, ^5.00, $10.00, and no more. Law makes and unmakes money. The gold eagle, under the law of 1792, contained 15^ grains more pure gold than the eagle under the laws of 1834 and 1837. The second Act of June 28, 1834, changed the valuation of foreign gold coins in the United States to make them cor- respond with the law of June 28, 1834, changing the standard fineness of gold in the United States. This shows how completely metallic money, as well as other money, is made and controlled by law. Law makes and unmakes money. Why were so many coin laws passed by Congress in one month ? There is a history in this worthy of being known. Profound lessons have been drawn, by some real econo- mists, from the effect of the change of ratio in 1834, upon the financial relations of England and the United States. Henry C, Carey wrote in 1875 ■ — O^ '^^ American writers whose attention was then given to monetary questions, there was, I think, none whose opinions in relation thereto, were held in more respect than were those of my friend, Mr. Condy Raguet, from whose work, published in 1839, I take the following passage : " Prior to the passage of the gold bill above referred to, the metallic currency of the United States had been virtually, as above stated, a currency of silver, since the establishment of the Government — gold very rarely appearing — while that of Great Britain was of gold. The consequence was, that the currency of each was independent of the other ; and the contraction or expansion of each did not necessarily act upon the other. The contrac- tion in England, which preceded the resumption of specie payments, in 182 1, after a long suspension of 24 years, pro- duced no convulsion on this side of the Atlantic. Nor did our contraction, distressing and durable as it was, after the re- moval of the public deposits from the Bank of the United States, on October i, 1833 — which brought down the prices of 64 OUR MONEY WARS. Stock from 20 to 50 per cent., and led to the importation of $3,793,293 in silver from England alone, during the year ending September 30, 1834, — produce any convulsion in that country. Such would have continued to be the case, had the mint regulations remained without alteration. But no sooner was gold, by a change in its relative value to silver, rendered the most' profitable of the two metals to import, than we found the currency of England disturbed to a degree that rendered necessary an immediate reduction of her paper- issue ; although' the amount of gold drawn from her between the passage of the law, in June, 1835, and September 30 of the same year, was but $1,922,960. To our importation of gold in the years 1835 and 1836, instead of silver, may be ascribed that further contraction of the British currency, which led to the crisis of the latter year that was so fatal to American credits and American cotton ; by which millions of dollars were lost to the country. " Now as like causes \n\\ produce like effects, it behooves us to examine well into this matter; and if we find that we have committed an error, it is our duty to retrace our steps. Thus far very little progress has been made toward introduc- ing gold into actual circulation : notwithstanding that a large amount has been imported. Still, a long perseverance in the law will give us a gold currency : but it will be most dearly purchased. It will so closely ally our fortunes with those of Great Britain, that no convulsion can take place in the currency of that country that will not act directly and powerfully upon ours ; while, on the other hand, none can take place on our side that will not act directly upon hers ; and in so doing break down the prices of cotton and tobacco, and other American products, in the market of Europe, to the great injury of our planting interest." 1835. Banking in the Northwest. — The following shows how things were working at this time in the great Northwest. Mr. John Johnston, Alexander Mitchell's son-in-law, said at the Bankers' Convention in Saratoga, in 1880 : " The first bank in what is now Wisconsin was chartered in 1835, by the Legislature of the Territory of Michigan. In OUR MONEY WARS. 65 1836, three other banks were started, with a possible circula- tion of $1,800,000, by a legislature representing 20,000 people, scattered over 266,000 square miles. This area has now 600 banks. The panic of 1837 greatly discredited the circu- lation of the existing banks. In 1838, Wisconsin was re- duced to its present limits of 54,000 square miles. From 1836 to 1840, its population had increased 250 per cent., largely in consequence of the crisis of 1837. In 1839, George Smith and Alexander JMitchell came from Aberdeen, Scotland, to the western shores of Lake Michigan, as pro- moters of the Scottish Land Improvement Co., but they fell into the practice of banking. Their Wisconsin Marine and Fire Insurance Co. issued certificates of deposit as small as one dollar, and in volume up to $1,000,000. Wisconsin having been cleared of paper currency by the recent financial hurri- cane, these certificates of deposit had a great mission to per- form. The company encountered both adverse legislation and repeated runs. These runs were organized by the bankers and brokers of the other States. In 1S44, the Legislature repealed the company's charter. The spirited young Scotch- men issued a declaration that this action could not affect their rights, and that their notes would continue to be re- deemed in Milwaukee, Chicago, Galena, St. Louis, Detroit and Cincinnati. This strengthened them in the eyes of the public. The Peninsular Bank of Michigan often sent by steamboat large amounts of the company's circulation for redemption. The coin was always ready. The worst run of all was organized by Chicago brokers in 1849. Mr. Mitchell sent for coin to meet the raid, both by lake and land. The wagon broke down on the way, but the run was met. Its depositors never ran the company. Farmers, hearing that Mr. Mitchell was being run, would leave their crops to bring him what coin they had on hand." All this is natural enough. Though it is quite deplorable, we can't blame Mitchell, if this fool people made him the King of the Northwest, — its richest millionaire, — by neglect- ing to provide a suitable amount of Government paper money. Speculations in England in 1834, 1835 and 1836. — When the 800 State banks professing to. pay coin for all lia- bilities were, in 1833, 1834, 1835 ^"d ^836, supplying the people of the United States with money to engage in all S 66 OUR MONEY WARS. kinds of speculations, the banks of Great Britain, including the Bank of England, also professing to pay coin, were doing the same thing for the people of England ; and in the mone- tary crisis which followed, the Bank of England would have suspended but for aid received by her from the Bank of France [as usual]. These speculations were not caused or sustained by Government paper, or irredeemable money of any kind. Banks professing to pay coin were their sup- porters. OUR MONEY WARS 67 CHAPTER IX. 1836 to 1846. 1836. The Banks in Luck Again. — The Act of June 23, 1836, provides that the deposits of the United States should be made in State banks, and that said banks should do and perform for the Treasury all that the United States banks had done and performed. These banks obligated themselves to at all times pay coin, and to pay the Government two per cent, interest for certain deposits. They were to report their condition to the Secretary of the Treasury at certain periods. Thus it seems that, — strange as it may appear, — ■ Congress had not learned wisdom, by their experience with State banks in 1812, '13, '14 and '15. The two per cent, bait was a big inducement. But in less than one year after the act was passed, these banks all suspended, with a large amount of Government money on deposit — forty million dol- lars. The Treasury being without funds, Treasury notes were again resorted to ; and by them the business of the country and the Mexican war were sustained. The Govern- ment again came out a large loser by deposits in State banks. This led to the divorcing of the Government from all banks ; and excluding all bank notes from the Treasury, by the law of 1846. Wisdom of Sarsaparilla Townsend. — Notable echoes from this Jackson epoch are found in the pamphlets issued, from 1862 to 1864, by that wise and earnest patriot, S. P. Townsend, of sarsaparilla fame and fortune. He brings in an element not elsewhere considered, " The Albany Regency." For instance, here : — In the days of the old United States Bank, the Democracy broke the Bank and bankrupted the country, and succeeded in ruining the Whig party ■ because they made it appear that it was the Bank that destroyed the people [partly true, S. L.J : when the fact was the disaster was caused by destroy- ing the institution. It is due to the great Jackson to say that he never contemplated cessation of a national banking insti- 68 OUK MONEY WARS. tution : for he said in his veto message, " Had the Executive been called upon to furnish the plan for a bank, the duty would have been cheerfully performed." It was the corrupt Albany Regency, and their pet Safety-fund banking system, headed by Martin Van Buren, and the Albany Argus, that destroyed and brought into contempt and banished the national constitutional money; and filled the land with worth- less shin-plasters. These, having no foundation, soon van- ished ; or kept shifting and drifting like the sands of the desert, until, under Buchanan's" administration, the people became so impoverished that it was with difficulty the Gov- ernment could negotiate a loan of a few millions at twelve per cent, per annum. This same party, led on by the same Albany Argus, are pursuing exactly the same course in. re- gard to the legal tender Treasury notes. They have — in tens of thousands of speecljes and editorials — predicted that the use of these notes would ruin the country ; and clam- ored that they may be withdrawn ; which, if done, will as assuredly destroy business and credit, and bankrupt the country, as did the destruction of the old United States Bank. But what would be most unfortunate of all, these unprincipled politicians would come into power again ; raised from the ruin they had caused, aided by the weakness of Unionists, who are actually alarmed at prosperity I 1837. According to^n Act of 1836, the surplus in the United States Treasury was to be distributed among the States, in proportion to their population, beginning Jan. i, 1837. The Act of January 18, 1837, changed the alloy in silver coins from 103^ to 100 parts in the 1000 parts ; making both gold and silver coins, in the United States, 9-10 fine; and reducing the alloy in the silver dollar 3^^ grains ; but leav- ing the silver therein 371^ grains, the same as in the law of 1792. The dollar, under the law of 1837, is 41 2 J^ grains, instead of 416 grains, as under the law of 1792. Be it remem- bered that the Constitution says nothing about alloying gold and silver coins. Did Congress violate the constitution by so doing ? We think not. Panic of 1837. — March 4, 1837, Martin Van Buren be- came President. OUR MONEY WARS. 69 May 10, 1837, all the New York banks suspended. Sum- ner, of Yale, thus describes this matter : In March, a meeting was held in New York, which was addressed by Mr. Webster. He ascribed the distress to the interference of the Government with the currency, and to the " Specie Circular " [demanding that public lands be paid for in specie only]. A committee of fifty was sent to Washing- ton, to ask for the rescinding of the circular. In the address to the President (Van Buren), they said : " The value of our real estate has, within the last six months, depreciated more than forty millions." , " Within the last two months there have been more than 250 failures." " A dechne of $20,000,000 has occurred in our local stocks." " The immense amount of merchandise in our warehouses, has, within the same period, fallen in value at least thirty per cent." " Within a few weeks, not less than 20,000 Individuals depending on their daily labor for their daily bread have been discharged by their em- ployers; because the means of retaining them were ex- hausted." They ascribe all this, as they say, not to an undue extension of mercantile enterprise, but to the attempt to substitute a metallic for a paper currency, the removal of the deposits and the specie circular. The President did nothing. The banks all suspended May 10. Nearly all the hanks made money out of the suspension, and paid large dividends during the year. — History of Am. Cur- reiuy : W. G. Sumner. This last item is very significant — coming from such a gold idolater ! Tom Benton on Currency. — There were lively discus- sions in Congress on currency in 1837. Thomas Benton said, in the Senate': " The Government ought not to delegate this power if it could. It was too great a power to be trusted to any banking company whatever, or to any authority but the highest and. most responsible which was known to our form of government. The Government itself ceases to be independent, — it ceases to be safe, — when the national cur- rency is at the will of a company. The Government can undertake no great enterprise — either of war or peace — without the consent or co-operation of that company. It can- not count its revenues for six months ahead, without refer- ring to the action of that company, — its friendship or its en- •JO OUR MONEY WARS. mity, its concurrence or opposition, — to see how far that com- pany will permit money to be scarce or plentiful ; how far it will let the money system go on regularly, or throw it into disorder ; how far it will suit the interests or policy of that company to create a tempest or suffer a calm in the moneyed ocean. " The people are not safe when such a company has such a power. The .temptations are too great, the opportunity too easy, to put up and down prices ; to make and break fortunes ; to bring the whole community on its knees to the Neptunes who preside over the flux and reflux of paper. All property is at their mercy. The price of real estate, of every growing crop, of every staple article in the market, is at their com- mand. Stocks are their plaything — their gambling theatre — on which they gamble daily, with as little secrecy and as lit- tle morality, and far more mischief to fortunes, than common gamblers carry on their operations." Speaking of the acts of the Bank charter, by Jackson, and of De Toqueville's mistake about it, Benton says : — De Toqueville speaks of the well-informed classes who rallied around the Bank ; and the common people, who had formed no rational opinion about it, and who had joined General Jack- son. Certainly the great business community, with few ex- ceptions, — comprising wealth, ability and education, — went for the Bank, and the masses for General Jackson. But which had formed the rational opinion is seen by the event. The " well-informed " classes have bowed not merely to the de- cision but to the intelligence of the masses. They have adopted their opinion of the institution — condemned it — repudiated it as an " obsolete idea " ; and of all of its former advocates not one now exists. All have yielded to that in- stinctive sagacity of the people, which is'an overmatch for book-learning ; and which, being the result of common-sense, is usually right ; and being disinterested, is usually honest. Calhoun" ON Currency. — John C. Calhoun, in his speech in the Senate, in 1837, when the banks were suspending, — ' with the public money in their vaults, — made the following remarks : — It is, then, my impression that, in the present con- dition of the world, a paper currency in some form * * * is almost indispensable in financial and commercial opera- tions of civilized and extensive communities. In many re- spects it has a vast superiority over a metallic currency ; eS' OUR MONEY WAIiS. 71 pecially in great and extended transactions, — by its greater cheapness, lightness, and the facility of determining the amount. It may throw some light on this subject to state that North Carolina, just after the Revolution, issued a large amount of paper, whicli was made receivable in dues to her. It was also made a legal tender; but which, of course, was not made obligatory after the adoption of the Federal Con- stitution. A large amount — say between $400,000 and $500,- 000 — remained in circulation after that period, and continued to circulate for more than 20 years, at par with gold and sil- ver during the whole time, with no other advantage than be- ing received in the revenue of the State, which was much less than $100,000 per annum. No one can doubt but that the Government credit is bet- ter than that of any bank ; more reliable ; more safe. Why, then, should it mix up with the less perfect credit of those institutions ? Why not use its own credit to the amount of its own transactions ? Why should it not be safe in its own hands,while it shall be considered safe in the hands of 800 private institutions, scattered all over the country, and which have no other object but their own private profit ; to increase which, they extend their business to the most dangerous extremes ? And why should the community be compelled to give six per cent, discount for the Government credit, blended with that of the bank, when the superior credit of the Government could be furnished separately without discount, to the mutual advantage of the Govern- ment and the community ? But whatever may be the amount that can be circulated, I hold it clear, that to that amount it would be as stable in value as gold and silver itself, provided the Government be bound to receive it exclusively with those metals in all its dues, and that it be left perfectly optional with those who have claims on the Government, to receive it or not. Again he said : We are told the form I suggested is but a repetition of the " old Continental Money," a ghost that is ever conjured up by all who wish to give the banks an ex- clusive monopoly of Government credit. There is not the least analogy between them. The one is a promise to pay when there is no revenue ; and the other a promise to re- ceive, in the dues of the Government, when there is abun- dant revenue. 72 OUR MONEY WARS. One Mill per Annum. — Judge Warwick Martin says of the Act of October 12, 1837 : — The banks had all suspended, with nearly $40,000,000 Government funds. Not one year before, the law had made these banks public depositories, with their promise that they would always pay coin for all liabilities. The Government had, in 1835, paid ofE the last dollar of the national debt. The surplus then in the Treas- ury was near $40,000,000. This was in the banks. The Government had no money to pay ordinary expenses, unless the Treasury used suspended bank notes. This Mr. Van Buren, then President, refused to do. He called Congress together to meet the emergency. Their remedy for the emergency was to issue Treasury notes, which Jefferson says are the only reliance of a nation. This Act of October 12, 1837, provided for the issue of $10,000,000 Treasury notes, in denominations not less than $50, running one year. The law left the interest which they were to bear discretional with the President and the Secretary of the Treasury ; but in no case was it to exceed six per cent. Congress appeared too timid to make these notes money, bearing no interest. They did not authorize the Secretary to so make them. They did, however, leave the rate of interest which the notes were to bear discretionary with him. He, knowing that the people needed them as money, complied with the law, by caus- ing many of these notes to bear one mill interest per annum. As such, they circulated freely as money, and the people were delighted to get and use them. They answered all the purposes of coin, and equalized the exchanges throughout the country. The banks did not at that time possess suffi- cient power to injure them. The writer was then in the mer- cantile business in Pittsburg, Pa., and he often saw and re- ceived them in business. They were made legal tender for all debts due the United States ; and were payable to credi- tors of the Government, as all the other Treasury notes had been. They, like the notes of the Bank of England, were, under this law, never to be paid out of the Treasury but once. Upon returning they were all canceled. The Act of October 16, 1837 — (Statutes 5, p. 206) author- ized the Secretary of the Treasury to settle with the deposit banks upon the best terms he could — said banks having all suspended, owing the Government some $40,000,000, which they could not pay, excepting in their suspended bank paper, OUR MONEY WARS. 73 A Thinker cries " Eureka ! " — 1837 brought out a great thinker and writer on finance, from among the New York merchants, — Edward Kellogg. Edward Kellogg was a prosperous merchant ; but the panic of 1837 dragged him into the whirlpool of financial ruin ; he had become bankrupt, through no fault of his. He studied the question of panics, in all its bearings, and lay- awake many a night pondering over the causes of hard times. And one night, in 1843, after lying awake, as he had often done before, he jumped up, exclaiming, in the very words of the old Greek philosopher, "Eureka"! and sat down to write out the points of his discovery. He had " found it ". The whole trouble lay in the fallacy that placed money, the life-blood of the world's industries, under the control of the few, and made it a monopoly. As a matter of course, the first pamphlet he wrote was incomplete. But he wrote more, and rewrote the first one. His gifted daughter, Mary, was his valuable and trusted assistant ; and soon, as a result of their joint labors, we had his book, "A New Mone- tary System," which has been a text-book and guide for labor and currency reformers ever since. 1838. The Act of May 21, 1838. — This act authorized the re- issue of the $10,000,000 Treasury notes issued under the Act of 1837, which that act provided should be canceled on their return to the Treasury. It was unwise in Congress not to provide that these Treasury notes, which bore no interest, should remain uncanceled until worn out; when new notes should have been given for them. It has taken time and a great war to open the. eyes of the people, and Congress, to see what Jefferson saw in 1813. Albert Gallatin, when president of the Bank of North America, of New York City, in 1838, said at a bank conven- tion ; " \\'e all know that while a bank note bears upon its face a promise to pay the amount of its denomination in coin, it carries with it the implied condition that it be not asked for." Many years later, that great philosopher, Henry C. Carey, quoted this, and said : — In other words, he might have said, Whenever British banks and bankers are inflating the cur- rency, British manufacturers flood our markets with goods 74 OUR MONEY WARS. to be sold at long credits. Money and credit then abound among ourselves. Specie not being needed, our banks follow suit, largely extending their loans, and thus inducing their customers to enlarge their business, to build ships and houses, and to make new roads. Ayear or two passes, and we enjoy what is called prosperity. Then, however, comes from across the Atlantic a chilling frost, in the form of refusal of new credits, and withdrawal of old ones, and in all other of the usual accompaniments of a crisis. The little specie we then have on hand is drawn out, — the gold for Britain, and the silver for France or Germany, — compelling us to insist upon payment by our customers ; most of whom, unable to pay, become bankrupt. We, ourselves, then, after fruitless efforts, resort to suspension, in the hope and belief that State legislators may manifest their pity for us, by legalizing, for a year or two, the violation of the laws to which we have been driven. Such is the frue financial his- tory of the country, throughout seventy years that we were making believe to use machinery of exchange like that in use in France, England, and other manufacturing countries of Europe. At intervals of half-a-dozen years, our mone- tary bag has been inflated from abroad ; the balloon then rising, to be suddenly collapsed at the will of foreign bank- ers, — with ruin to all who have been led to go in debt ; leaving them, and their families, to start in the world anew ; with the stain of bankruptcy clinging to them in all the future. In 1838, Henry C. Carey printed his great book, "The Credit System in France, Great Britain and the. United States." He announced the then novel doctrine that, among the many vices of the credit and banking systems of England and America, — which always have been so closely related, as to be almost, if not absolutely identical, — the most de- structive was that which permitted banks to lend, without restriction, money or credits deposited with them for safe- keeping. He was, thus, the first to thoroughly expose )he sham andevil hidden under "bank deposits and loans," which are largely the mere moonshine of inflated bank credits — alias debts. 1839. One financial event of this year was the book on Money printed by Condy I^aguet, much quoted by H. C. Carey and others. OUR MONEY WARS. 75 The Phila. Bank of the United States (Nick Biddle's) stopped October 10, 1839, followed by nearly all the banks of the South and West. It finally closed February 4,1841. The great deserted palace of a bank building stood there on Third Street in i860, and later — a monumental warning against too much "private enterprise." 1840. The Act of May 31, 1840 (Statutes 5, p. 370). — This law renews the Act of 1837, relating to the issue of Treasury notes, and makes the following modifications: i. That they were to be issued in place of those redeemed ; not to exceed in this issue $5,000,000. 2. They were to be redeemed in less than a year, if the Treasury was in a condition to redeem them. 3. When ready to redeem them, the Secretary of the Treasury was to give notice. 4. After due notice, the notes should cease to bear interest, if they remained out. This act was to continue only one year. It is evident that Con- gress supposed the necessity for issuing Treasury notes would soon cease, but they were mistaken. The Act of July 4, 1840, was the first independent Treas- ury act of the clays of Mr. Van Buren. The money of the Government was to be kept by the Government, instead of the banks, in mints, custom-houses, post-offices and the Treasury building. The main feature of the bill was that after January 3, 1843, no payment should be made to the Gov- ernment in anything but gold and silver coin. The banks were then suspended. The Government was being sustained by Treasury notes. But still this law provided that after January, 1843, Treasury notes should be excluded from the Treasury, as well as bank-notes — an insane procedure. An appeal was made to the people, that year, upon this law ; and they re- pudiated it by electing Gen. Harrison president. This law provided penalties for any Government official who sold gold and silver for paper money, and paid the debts of Govern- ment therein. It also prohibited Government drafts from being sold as money. This was an epoch to delight the soul of Sumner of Yale, and warm the cockles of his frigid heart. Judge Warwick Martin says of this singular effort : — ■ From 1837 until 1840 the first effort of the Democratic party, and of any considerable number of the American people, to obtain coin only for the Treasury ^Yas made. 76 OUR MONEY WAR'S. Then it was advocated by Mr. Van Buren and Mr. Benton. At first, their object was simply to separate Government money from that of individuals, by divorcing the Govern- ment and all banks, by the establishment of the Sub-Treas- ury. But the question came up naturally, what kind of money shall be received and held in the Treasury 1 The leaders of this branch of the Democratic party did not think of providing a reliable, sound, uniform currency for the people. They left the State banks to supply this currency. All Mr. Van Buren and Mr. Benton aimed at was to furnish money for the Government. They induced a majority of Congress in 1840 to pass an act making gold and silver coin, only, the money of the Government, receivable for taxes and duties. Though the Government was then being sustained by Treasury notes, this law excluded them from the Treasury also. Mr. Calhoun nobly defended Treasury notes ; showing their equality with coin whenever they had been tried, and their great superiority over bank notes, whether State or National. But the hard money prevailed this one time. As Treasury notes then in the hands of the people, provided upon their face and in the laws enacting them, that they should be received for all debts due the Government, the law of 1840, which excluded them from the Treasury, was a violation of the Constitution in that behalf, and treated it as such ; and the Treasury notes continued to be received the same as before this law passed. No law ever passed by Congress, excepting the sedition law of John Adams, was so unpopular as this law. The people had not called for it. It oiade a distinction between the money of the Government and that of the people. The people must be satisfied with State bank notes. The Government officials must have hard money, which was generally at a premium over our bank notes. Mr. Van Buren went before the people on hard money and was defeated, with all the office-holders to aid his election. This was the only opportunity the people of the United States ever had to vote upon hard money, and they rejected it and its advocate and author. 1841. President Harrison Died in April, and Mr. Tyler became president. One of the first acts of the Whigs was to avithorize the issue of $12,000,000 of six per cent. OUR MONEY WAKS. 77 bonds, to take up the Democratic Treasury notes ; though the people were satisfied with them, and they bore little or no interest. This was an act to benefit the capitalists, and to injure the people, by depriving them of $12,000,000 of the best money, which they greatly needed, and imposing upon them an annual payment of $720,000 for no good pur- pose. But the great object of the Whigs was to establish a National bank ; and the scarcer they made the money of the country, for the time being, the greater would be the demand for the bank. An. agent was sent to Europe to sell the $12,000,000 of bonds; but he failed to sell them ; and the Whigs, though they did it reluctantly, were compelled to issue Treasury notes to run the Government. But Congress were, as usual, ready to carry out the wishes of the money power. They, therefore, chartered a bank of the United States, with a capital of $50,000,000, which was vetoed by Mr. Tyler. Another bank was chartered, called. " The Fiscal Corporation," which was also vetoed. The Act of August 13, 1841, repealed the Democratic Act of June, 1836, excluding the notes of the Bank of the United States from the Treasury ; and provided that said notes should, thereafter, be received therein ; though the bank was then a only State bank. That same year the bank made its disastrous failure. This act also repealed the act of 1840, called the First Sub-Treasury Act ; and provided that bank notes should be received in the Treasury. Relief Notes. — In 1841, Pennsylvania was on the verge of bankruptcy. The State was unable to pay interest on the public debt ; or even pay the wages of laborers for work done onthe public improvements. Corporations were bankrupt, and merchants were in nearly as bad a situation. There was no money ; and, consequently, trade and production were completely paralyzed. The State of Pennsylvania, in this crisis, issued $3,100,000 of what was called " Relief Notes ", bearing simply a promise that they would be received by the Treasury of the Stale, in payment of all taxes and other obligations due to the State. These were taken greedily by the people. Banks inserted in the front of their books an agreement that the depositor should receive on check the same kind of money he deposited, and then took these notes. They discounted paper with them. The wheels of industry were set in motion by these notes, which promised 78 OUR MONEY WARS. nothing but that they would be received in payment of State taxes. The State paid her domestic creditors ; and these hastened to pay theirs, or to supply their wants by purchase ; crops, for which there had been no market, moved. 'J'he loom and the spindle were heard again. Labor — lifted from despair — found work and wages. With the great re- sources of Pennsylvania under full and free development, she was soon exporting more than she imported. Gold and silver — as usual when not needed — flowed in upon her ; and the broken banks resumed specie payment. Indiana Treasury Notes. — Judge Warwick Martin says that, in 1841, the State of Indiana required money to com- plete her public works, and issued Treasury notes to meet the demand. These notes bore interest, and were paid out by the State to those to whom the State was indebted. At first banks and bankers turned up their financial noses at them ; but both the principal and the interest were receiv- able for all taxes due the State ; and it was not long until they were at a premium everywhere. " The writer speaks from personal knowledge upon this subject, having received and paid out large amounts of these Treasury notes. Indiana has generally had the best State money of any of the United States ; and these Treasury notes were the best money the State ever had. They wei>e all redeemed by the payment of taxes, as the law provided they should be." President Tyler had a good Instinct about Finance. — He said in his Message of December 7, 1841 (Vol. II., p. 1 261) : — In pursuance to a pledge given to you in my last Message to Congress (which pledge I urge as an apology for adventuring to present you the details of my plans), the Secre- tary of the Treasury will be ready to submit to you, should you require it, apian of finance which, while it throws around the public treasure reasonable guards for its "protection, and rests on powers acknowledged in practice to exist from the origin of the Government, will, at the same time, furnish to the country a sound paper medium, and afford all reason- able facilities for regulating the exchanges. When sub- mitted, you will perceive in it a plan amendatory of the exist- ing laws in relation to the Treasury Department — subordinate in all respects to the will of Congress directly, and the will of the people indirectly, self-sustaining, should it be found in practice to realize its promises in theory, and repealable at the pleasure of Congress. OUR MONEY WARS. 79 It proposes, by effectual restraints, and by invoking the true spirit of our institutions, to separate the purse from the sword ; or, more properly to speak, denies any other control to the President over the agents who may- be selected to carry it into execution, but what may be indispensably necessary to secure the fidelity of such agents ; and, by wise regulations, keep plainly apart from each other private and public funds. It contemplates the establishment of a board of control at the seat of government, with agencies at prom- inent commercial points, or wherever else Congress shall direct, for the safe-keeping and disbursement of the public moneys, and a substitution, at the option of the public credi- tor, of Treasury notes in lieu of gold and silver. It proposes to limit the issues to an amount not to exceed ^15,000,000, without the express sanction of tlie legislative power. It also authorizes the receipt of individual depositors of gold and silver to a limited amount, and the granting of certifi- cates of deposit, divided into such sums as may be called for by the depositors. It proceeds a step further, and authorizes the purchase and sale of domestic bills and drafts, resting on real and substantial basis, payable at sight, or having but a short time to run, and drawn on places not less than 100 miles apart ; which authority, except in so far as may be necessary for Government purposes exclusively, is only to be prohibited by the State in which the agency is situated. I am not able to perceive that any fair and candid ob- jection can be urged against the plan, the principal outlines of which I have thus presented., I cannot doubt but that the notes which it proposes to furnish at the voluntary op- tion of public creditors, issued in lieu of the revenue and its certificates of deposit, will be maintained at an equality with gold and silver everywhere. They are redeemable in gold and silver on demand, at the places of issue. They are re- ceivable everywhere in payment of Government dues. The Treasury notes are limited to an amount of one-fourth less than the estimated annual receipts of the Treasury, and in addition, they rest upon the faith of the Government for their redemption. If all these assurances are not sufficient to make them available, then the idea, as it seems to me, of furnishing a sound paper medium of exchanges, may be en- tirely abandoned. The President of the Bank of England. — When the 8o OUR MONEY WARS. Phila. Bank of the United States failed, in 1841, that institu- tion was largely in debt to the Bank of England. The president of the latter bank came to the United States to look after this debt. When he landed in New York, he read in the papers the Message of President Tyler, recom- mending that the permanent money of the country should be issued by the Government. He lost no time in visiting Washington and the White House ; where and when he ex- pressed his admiration of the monetary system advocated by President Tyler; and stated that it should he adopted not only by the United States, but by England and every other great nation. 1842. The United States Could not Borrow. — The Act of April 15, 1842, extends the time for selling the $12,000,000, of bonds one year, and provides that the loan might be made to extend any time that the Secretary and the purchaser might agree upon : not beyond twenty years. It also added $5,000,000 to the loan. The stock is allowed to be sold at less than par, if the President agreed thereto. No such thing had occurred since the close of the war of 1812. The United States did not owe $30,000,000 at that time ; and they could not sell $12,000,000 of bonds at par; though taxes and duties were pledged for their payment. The Whigs were compelled to fall back upon Treasury notes. These notes were then bearing only nominal interest ; but the Whigs provided, in this act, that all Treasury notes then out and those issued thereafter should bear six per cent, in- terest; and that they should be redeemed as soon as bonds could be sold for that purpose. These are the facts, though the Treasury notes were in good credit, and the people were satisfied with them. But a war was going on between the Whig Congress and President Tyler. The latter advocated the issuing of all the paper, as well as the metallic money by the Government ; but Congress wished the paper money issued by a National bank. The President vetoed the bank bill. Congress, by way of heading him off, passed the act to make Treasury notes bear six per cent, interest, instead of being used as money. The Act of June 30, 1842, provided for the issue of $5,000,000 Treasury notes to run one year, which were tegal OUR MONEY ]VAKS. 8 1 tender for all debts to the Government, and were to be paid to such public creditors and others as were willing to receive them. The creditors always preferred them. The Secretary of the Treasury is authorized to have these Treasury notes placed to his credit in banks at par and accrued interest or otherwise, to borrow money upon them. The interest upon these notes was five per cent. The Act of August 31, 1842, makes certain further pro- visions respecting the sale of the ^17,000,000 bonds which had not yet taken place. This act provides that unless they could be sold at par, the Secretary of the Treasury should issue $6,000,000 Treasury notes. They were compelled to have recourse to what Jefferson calls the only resource of a nation. The Treasury notes authorized by this act may be reissued. 1843. The Act of March. 3, 1843, fixed the value in the United States of «ertain foreign coins. The thaler of Prussia is made 68 cents-, the milric of Portugal $1.12; the rex dollar of Bremen 77 cents; the milric of Madeira $1.00; the milric of the Azores 83 J/^ cents; the mark banco of Hamburg 35 cents; the rouble of Russia. 75 cents; the rupee of British India 44 J^ cents. This was Whig law. An Act of March 3, 1843, authorizes the issue of new Treasury notes to supply the place of those redeemed ; and that interest should be paid upon Treasury notes after their maturity. The act provides that bonds may be issued for Treasury notes, that sliall run three years. Sumner of Yale Explains Things. — Discussing the affairs of 1843, in his " Currency ", which was not written in Bloomingdale Insane Asylum, that marvelous genius, Sumner, says : " The cases we have had to deal with hitherto have presented us with the simple phenomenon of the exportation of precious metals and increased importation of commodi- ties, due to the repetition of the grossest error possible in currency — the attempt to use two kinds of circulating me- dium : one inferior to the other." Yet, in all this time — 1600 to 1843, — he has never shown how our people could have got the necessary coin. He is evidently like the philosopher who replied to the man who excused some action of his by say- ing, " Well, I must live ! " by the very positive retort ; " I 6 82 OUR MONEY WARS. am not so sure of that." Sumner's icy dictum is : " Do it or die ! " Further on, this serene sage says : " The movement of specie would, therefore, be, if the whole world used the metals, and regulated prices by them, without interference, as regular, as self-controlled, and as beneficent as the movement of the tides." The fact is that the action of the tides is con- trolled — like much of Sumner's cerebral action — by the moon (lund). Well, what can you expect of a man whose fetish is that prodigious rubbish, " The British Bullion Report of 1810," of which he says : " So much, however, in regard to the laws which govern paper issues, as was laid down in the Bullion Report, is established beyond dispute. Its doctrines are the alphabet of modern finance ! " Any one who wants to read this precious document will find it as an appendix to Sum- ner's book. Read it, and " learn with how little wisdom nations are governed." 1845. • The Act of March 3, 1845, fixed the value of the florin of Russia at 48 cents. This was also a Whig act, and one of the last approved by Mr. Tyler. In 1845 the Democrats came into power again. They fought the Mexican War with Treasury notes. OUR MONEY WARS. ' 83 CHAPTER X. 1846 to 1856. 1846. The Act of May 22, 1846, regulated the value in the United States of the following foreign coins : Of Norway, Sweden, Denmark, Prussia, Northern and Southern Germany, Austria, Belgium, Augsburg, Sardinia, Naples, Nova Scotia, and New Brunswick. Previous to this act these coins were not money in the United States. No foreign coins are money here now. They have all been demonetized. The Act of July 22, 1846, makes the following provis- ions : I. That Treasury notes should be issued to take the place of those destroyed, to the extent of $10,000,000 only of this issue. 2. If the President saw proper he might issue stock in place of Treasury notes. 3. This act provides for the payment of $50,000 Treasury notes which had been stolen. The Act of August 6, 1846, Establishes the Indepen- dent Treasury, which had been attempted in 1840, but had failed. The law of 1840 was repudiated by the people. The law of 1846 was sustained by the people, of all parties, from 1846 until 1861 ; and many of its provisions are still con- tinued. The principal difference between the two acts was, that the law of 1840 excluded all Treasury notes as well as bank notes from the Treasury after January i, 1843 ; but the law of 1846 made all Treasury notes issued by the United States, and gold and silver coins, equal in the payment of all debts due the Government. This act divorced the Government from all banks, exclud- ed all bank notes from the Treasury, and made all Treasury notes legal tender, the same as coin, in payment to the United States. It also provided that the officers of the Government, under bonds, should receive and keep all the money of the United States, and deposit the same in the Treasury, instead of in banks ; and that the money of the Government should 84 " OUR MONEY WARS. be kept separate from that of individuals. This was one of the best laws ever enacted by the Democratic party. 1847. Money for the Mexican War. — The Act of January 28, 1847. The Mexican War was then in progress. The expend- itures of the Government were large. An emergency ex- isted. The remedy of which Jefferson speaks was at hand. A large issue of Treasury notes was ordered. Twenty-three millions were provided. This was a large sum for those times; more than ^500,000,000 would be now. The rate of interest on this J23, 000,000 Treasury notes is not provided by law. It is left to the Secretary of the Treasury, and the party to whom they were paid. These notes were intended to be used as money ; and if parties would take them at one mill interest, the Secretary had a right to issue them. Many of them were so issued and used ; greatly to the satisfaction of the people. Speculations and Panic of 1847. — Previous to 1847, all the banks of the United States had professed resumption. In this year, immense speculations took place in corn, wheat, flour, pork, beef, and all kinds of American productions. Large purchases were made of these commodities, which were shipped to England. Prices fell after the purchases and the arrival of the produce at its place of destination. Many failures took place in both countries, as a consequence of these speculations. Be it remembered that the money to engage in the speculations was not suspended bank paper, or the notes of the Government. On the contrary, all the money for these speculations was furnished by banks of the United States, which at that time professed to pay coin for all their liabilities. [S. Leavitt had reason to remember this speculatiofT; for his father was drawn into it and bankrupted by it, though he got safely through the panic of 1837.] Nearly every witness who testified before the secret com- mittee of the House of Commons, in 1857, agreed that gold could only be held by paralyzing the business of the country. It is estimated, by witnesses who testified before that com- mittee, that in the panic of 1847, in Great Britain, the prop- erty of the country, by reason of the measures rendered necessary to maintain the single gold standard, was depre- OUR MONEY WARS. 85 ciated $1,500,000,000. J. W. Shuckers says that the Bank of England made untold millions out of this panic. France Helped the Whole World. — A way in which France has singularly helped the whole world is seen in her resolute maintenance of the ratio of 15^^ silver to one of gold, during all this century. This fact was described by Senator Jones, of Nevada, in his speeth, in April, 1890, in the Senate, thus : " Not only did the French law keep the metals together at that time, when the larger annual yield was of silver, but it kept them together when the larger annual yield was of gold. Had not that law been in operation during the Fifties, when a flood of gold poured from the mines of California and Australia, gold would have fallen, as in early times it more than once fell, to the ratio of i to 10 ; at which but 10 ounces of silver (instead of 15^^) would buy an ounce of gold. Thus the law of one country alone — a country then of not more than one-half the population of the United States — held the metals together ; so that to whatever ex- tent gold fell in relation to commodities, from 1848 to 1865, by reason of the large output of the mines, silver fell to the same extent ; notwithstanding the enormous decrease in its production relatively to gold, during that period." Of course there was no logical propriety about this ; but it was fortunate — since most of the world still wishes to in- dulge in the luxury of commodity money — that France thus helped to prevent fluctuation in the currency. According to the statement of Mr. Pierson, Netherlands commissioner before the International Monetary Conference of 1881, in 1803 bimetallism was established in France and continued until 1873. From 1803 to 1820 there was a yield of four times as much silver from the mines as gold ; after that, until i860, the yield of the metals was reversed, and the mine output was four times as much gold as silver. The coinage in France from 1820 to 1847 was nine times more silver than gold, and from 1857 to 1866 the coinage was sixty-four times more gold than silver ; and yet, in all these eighty years of fluctuation in metallic production, while her silver money averaged 69 per cent, to 31 per cent, of her gold money, the variation in the market rate between gold and silver bullion was never piore than 2 per cent. ! 86 OUR MONEY WARS. 1848. Speculation and overtrading had not much to do with the panic of 1848. The abdication of Louis Philippe, and the Revolution in France, had most to do with it. 1849. The Act of March 3, 1849, Created the- Gold Dollar and the Double Eagle. — The one was to be of the value of a dollar and the other of twenty dollars. The only dollar, that had, thus far, been created and coined was the silver dollar. This law did not make a gold dollar, but it did make a gold piece of the value of a dollar. This is the reading of the statute. There has never been in the United States a piece of gold called in the law $1, $2.50, $5, or $10. The gold pieces have been of the value of $1, of $2.50, of $5, of %\o, and of $20. All of them were made, by the laws creating them, legal tender with the dollar. The dol- lar was the unit of value and of the money of account, by which gold was valued. Wild Cats in New England. — There was " heaps of money " in running State banks in those days, " while the thing lasted." The extent to which these banks were enabled to loan their credit by means of the specie basis will appear from an examination of the report of the Commissioners of the banks of Connecticut, for a period of 12 years, from 1837 to 1849. The condition of Connecticut banks may be taken as an average of the banks of the country. The Connecticut report shows . Average capital, $8,688, 295 ; average liabili- ties, $13,129,230; average specie, $478,719; average loans and discounts, $11,669,457. 1850. Gold Down. Silver Up. — After the discovery of vast fields of gold in California and Australia, in 1849, 1850 and 1851, there was great demand for silver coin for the pur- chase of gold ; and the impression becoming general that these large acquisitions of gold would depreciate its value, a universal disposition was manifested among bullionists to exchange gold for silver. This caused United States, Spanish, Mexican, and Central and South American silver dollars to rise to a premium of two and three per cent, for gold, at which price the Rothschilds purchased them, not OUR MONEY WARS. 87 only in the United States, but in all the European markets of exchange. That the law of 1834 was not the only or principal cause of these purchases of silver, is evident from the fact that they were not confined to the United States, but existed in Europe to a greater extent than here. There the relation of i to 16 did not exist. But one other fact had greater influence in causing this result. About this time, commercial treaties were, for the first time, entered into be- tween China, the'United States and Great Britain. Silver dollars were the principal circulation of China. The Chinese were ignorant of the fact that, in Europe, silver was worth 'S/^ pounds of silver to i pound of gold, and in America 16 to I. The Chinese used gold blocks for large transactions, and they valued gold at only one to 5. There a pound of gold was worth only five pounds of silver, while in Europe it was worth isJ-^, and in America 16 pounds of silver. Large quantities of dollars were therefore sent from all parts of Europe to purchase this gold in China. China was drained of gold and filled with silver dollars. Europe and America were drained of silver dollars and well supplied with gold. Owing to these facts Holland demonetized gold. John Thompson said to me : " As to gold being related to silver as one to five in China, it seems like an immense speculation ; and many might suppose that Europeans made great fortunes out of it, before the Chinese discovered the trick. But I know that this was not so ; because there was so little gold in China." 1851. Bank Notes in Australia. — In 185 1 nearly all the silver of Europe was sent to Australia to be invested in gold. When Great Britain v/as thus drained of silver, and no more could be sent to meet this demand, the British Govern- ment authorized the establishment of a bank in Australia, the notes of which were to be paid out for gold bullion, in- stead of silver coin. The bank was authorized to issue three dollars or pounds sterling of notes to every dollar or pound sterling of gold bullion held by the bank ; and said notes were made by the law creating the bank legal tender the same as coin. The result was that all the bullion and coin went into the bank, and the notes of the bank circulated among the people in the business of the country, though 88 OUR MONEY WARS. they were the notes of a bank only, not those of a nation. Thus England always protects her own interests and her own (rich) people, at least, while the Congress of the United States legislates for the benefit of England. The following is the Journal des Economistes' table of the production of gold and silver from 1852 to 1876 : Date. Gold, millions. Silver, millions. Total. 1852 i82>^ 40/4 223. 1853 ISS 4oJ^ 195^ 1854 127 40>^ l6^y^ l8SS 13s 40>^ ^1S% 1856 i47>^ 4°/^ 188 1857 133 4°/4 173^ 1858 12414 ^oYi 165 1859 1241^ 4°/^ 165 i860 119 \°V2 159^ 1861 114 42 j^ i56>^ 1862 io7>^ 45 i52>^ 1863 107 49 156 1864 "3 Si>^ 164^ i86s 120 52 172 1866 121 5o>4 lyij^ 1867 116 54 170 1868 120 5° 170 1869 121 M% 168 >^ 1870 n6 S^% 16714 1871 ii6>^ 61 i77>4 1872 lOI^ 65 166 >^ 1873 io3>^ 70 ^n% 1874 9o>^ 1^% 162 187s 91% 62 i59>^ 1853. The Act of February 26, 1853, Created the First Limited Legal-tender coin in the United States. Pre- viously all United States gold, silver, and copper coins had been full legal tender. The rich and the poor had the same money. Now, and since 1853, we have one money for the rich, and another money for the poor, as the nations of Europe have. Under this law halves, quarters, and dimes were made over seven per cent, light, and lawful money for OUR MONEY WARS. 89 ^5 only. They were as good as the silver dollar, or gold, up to %^. Above that sum they were not money, but light bullion. Two half dollars have, under this law, 384 grains standard silver — 28^^ less than the dollar. This act was among the last approved by a Whig President. It should be repealed. The Clearing-house, which had been suggested by Albert Gallatin, in 1841, was finally established in 1853, on the plan of Mr. George Curtis. go OUR MONEY WARS. CHAPTER XL 1856 to 1861. 1857. The Panic of 1857. — Here we enter another great finan- cial epoch. Proposing to give several explanations from reliable authorities of the causes of the terrible panic of 1857, we begin with a short one from an unknown writer — which seems to touch bottom as to the cause that " lay nearest to it." Here it is : — The immediate cause is not generally known. It was this : In the latter part of 1857, when the Bank of England was struggling to maintain specie payments, it came into the New York market and sold about seven million dollars worth of American securities ; and took the gold from the banks of that city. Knowing the condition of that huge bank, and .that it had plenty of American securities, the New York banks became exceedingly alarmed, and began to contract and call on the country banks for gold. " Hinc illm lachrymce ! " Here is one of the deep causes : The Act of February 21, 1857, Demonetized all Foreign Coins in the United States. It was done by the Democratic party. It was a strange act for those who favor hard money, and insist that the law does not make metallic money ; but that the metal is money without authority of law and without the stamp of the nation, as a few ignorant Democrats now do. Since February 21, 1857, no foreign coin has been money in the United States, because the laws of 1857 and 1873 say it shall not be. The law makes and unmakes money. The law of 1873 was a Republican act. The law of 1857 also created a new cent and three-cent piece, composed of 88 parts copper and 12 parts nickel, which were made full legal tender, and were to be used to redeem the old heavy cents. This law introduces a new metal into our coinage. We refer to nickel. It had never before been used, It is not named in the Constitution. Have the OUR MONEY WARS. 91 Democrats violated the Constitution by using tliis metal ? We think not. The signing of this act was one of the last acts of Mr. Pierce. It was in favor of the bullion brokers. So long as all foreign coins were money they could not buy and sell them at a profit. Now for Stephen Colwell. The panic of 1837 roused that great and noble New York merchant, Kellogg, to write his " New Monetary System." The panic of 1857 roused that equally great and noble Phil- adelphia merchant, Stephen Colwell, to write his " Ways and Means of Payment." Here is some of his talk about the immediate effect of the latter panic : — The late panic has inflicted, in all its bearings and ramifications, a loss upon the country which maybe variously estimated from $500,000,000 to $1,000,000,000. No doubt the ill-effects of the panic were much enhanced by the previous abuse of credit, and that a considerable portion of this devastation should be set down to that account. With every allowance in that respect we shall have a vast sum of loss to charge to the panic. And whether this sum be $400,000,000 or $800,000,000 matters not, to our view. The loss was to a great extent unnecessary., cruel, terrible. — a loss which has carried privation, distress and ruin to a million of homes. For a time, at least, not yet passed, it reduced hundreds of thousands of the best people to a state of entire dependence, if not beggary. What was the occasion of these dire calamities ? The banks of the United States had a reserve of specie for several years previous to 1857 — and during the first half of that year - — amounting to somewhat over $50,000,000 ; and of this the banks in the city of New York held a little more than one- iifth. To save this amount of specie [from going to Eng- land. — S. L.] the. banks contracted the currency one-half; denied the usual facilities upon their books; put up the rate of interest to from 12 to 36 per cent. ; put down exchange upon England to nine or ten per cent, below par; reduced the revenue from customs to less than half the usual amount ; drew a surplus of $20,000,000 of gold out of the public Treasury ; drove the Government to an issue of paper promises to pay its current expenses ; deprived hundreds of thousands, perhaps millions, of their customary employment ; caused some 5,000 or 6,000 failures among men of business; and, finally, inflicted a loss on the country, in the depreciation 92 OUR MONEY WARS. of securities, in the reduction of prices, and by insolvency, of several hundred millions. Not to save this sum of $50,- 000,000 from being lost, sunk in the ocean, or thrown away, were all these evils encountered ; but merely to prevent it from passing into circulation among the people ; or, at the worst, to prevent it from being exported in payment of debts due in foreign countries. Nine-tenths of the debts of the country are paid, as we have seen, by the agency of discounts and deposits ; with some aid from the circulation of the banks. But the banks have been placed under such heavy penalties to pay all their liabilities on demand, that when they are threatened with a panic, a commercial revulsion, or a heavy export of specie to foreign countries, they are com- pelled — like Samson in the temple of the Philistines — to pull down the whole fabric of credit, public and private, about the ears of the people ; to disturb and check the prog- ress of industry in all its departments ; to make bankrupts of their customers ; and to sow pauperism broadcast in the field of labor. This compelled polic}' of the banks, under the stringency of the laws which govern them, has been called " paying specie.'" But with how little propriety. Instead of paying their liabilities with commercial promptness, and the faith- fulness of those who are discharging a legal and moral obligation, they resist it with all the power and weapons they can command. In the struggles incident to this resist- ance, they strike down friends as well as enemies ; and de- prive the public of an amount of currency, necessary to busi- ness, ten times greater than the specie they are unwilling to pay out. And this is the convertibility so long aimed at. and to secure which so much legislation and so much thought has been expended ! This is the triumph of banks which pass through a season of panic and revulsion without suspension [like Chemical Bank of New York. — S. L.] — a triumph like the victory which leaves 100,000 dead bodies on the field of battle; which makes 10,000 widows, 50,000 orphans and 200,000 paupers. Remember, in reading the above, that Stephen Colwell was a rich, prosperous merchant, not upset by that panic or any other. Here is what the always profound and reliable Judge War- OUR MONEY WARS. 93 wick Martin says, in a cliapter in wliich he refutes the idea that American panics liave been caused by speculation : — The suspension of 1857 was not caused by speculation. The causes were : i. The attempt to enforce specie basis. 2. In 1853 Congress demonetized all silver halves, quarters and dimes in sums over $5. Much of the reserves of the banks were in these fractional silver coins, which were full legal tender, and in gold and silver coins of the United States and of other countries. The -silver dollars of Spain, Mexico, South America, and the United States were worth a premium over gold, and were purchased by the Rothschilds and sent out of the country. The banks did not; therefore, hold them as reserves. The demonetization of these frac- tional silver coins deprived the banks of a large portion of their teserves, and of paying their circulation therein, these coins under the law of 1853 being legal tender for $5 only, 3. Up to Februar)', 1857, all foreign gold coins and the silver coins of most nations were, in the United States, full legal tender with our coins, at the values fixed by our laws ; and gold being, since 1834, ov'er-valued in the United States, immense quantities of these gold coins came to the United States and remained. They were also held by the banks as reserves in large quantities. But on the 21st of February, 1857, Congress demonetized all foreign coins of both gold and silver. These coins held by the banks as reserves were, after the passage of this law, no longer legal tender in pay- ment of debts, and the banks could not use them at par to meet their liabilities. They were compelled to sell them at their home value instead of at the value fixed upon them by the former laws of the United States. They were, therefore, sold and sent out of the country in large quantities, never again to return. It will be seen that the laws of 1853 and of 1857 greatly diminished the full legal-tender gold and sil- ver coins of the United States, reducing the reserves of the banks, and rendering them incapable of standing runs upon them for coin. 4. The law of 1846 divorced the Govern- ment from all banks and excluded all bank-notes from the Treasury, confining the receipts therein to gold, silver, and Treasury notes. This law was intended to weaken confi- dence in banks and in their circulation, and it had that efifect. It was in force in 1857 and up to 1861. Thesq^four causes combined prepared all the banks for suspension as 94 OUR MONEY WARS. soon as any disturbing influence arose in the banking or the commercial world. 5. This disturbing influence made its appearance in the failure of the Ohio Life Insurance and Trust Company in the fall of 1857. This bank had a capital of $2,000,000 and unbounded credit. The banks of the We.st kept large deposits with the New York agency. The entire solvency of the bank had not been suspected. Its credit had never, up to the day of its failure, been doubted. Its failure fell upon Wall Street like a ciap of thunder in a cloudless sky. It destroyed- confidence in banks. A run at once commenced for coin which the banks could not meet. The banks of New York and New England suspended, as banks always do under such circumstances, and those of the West and South followed. [Mr. Martin does not seem to know that a principal cause was a strong pull on gold from the Bank of England. — S. L.] Treasury Notes Again. — The winter session of Congress raised the courage to issue Treasury notes. The Act of De- cember 23, 1857, provides for the issue of $20,000,000 Treasury notes, to take the place of coin ; the banks having suspended with the coin in their vaults. The rate of interest was not fixed by the law. It was left to be fixed by the Secretary of the Treasury and the persons receiving the notes. These notes were intended to be circulated as money, though Con- gress had not the boldness to make them such in plain words. They were made legal tender in all payments to the United States, and were willingly received by the people. Many of them were outstanding in 1861. The Fall of Gold. — B. S. Heath says : — In 1857, in his work " The Fall of Gold," Chevalier said : " The quantity of gold annually thrown on the general market approaches, in round numbers, a milliard of francs ($200,000,000). For a long series of years, California and Australia must produce such quantities as to render a marked decline in its value inevitable. It is absolutely certain that a production so vast should be accompanied with a great reduction in its value. In no direction can a new outlet be seen, sufficiently large to absorb the extraordinary production of gold, so as to pre- vent a fall in its value. Unless, then, we possess a very robust faith in the immobility of human affairs, we must re- gard the fall in the value of gold as an event for which we should prepare, without loss of time." OUR MONEY WARS. 9S Under this and similar appeals, from different parts of Europe, by the money and creditor class (who saw, in the near future, their coin and their securities depreciating in value, relatively as the poor man's labor and the producer's wealth increased, through the increased volume of money), Germany, Austria and several other countries demonetized gold. On this subject, our Congressional monetary commission says : " The movement in Europe for the general demoneti- zation of gold would have become general, but for the re- sistance of France. It was changed, in 1865, into a move- ment for the demonetization of silver. But this change from demonetizing gold to demonetizing silver, was more of form than of substance. The object aimed at by both was a disuse of one of the money metals — to protect the creditor classes, and those having fixed incomes against a fall in the value of money, and arise in general prices of labor and prop- erty. This is the pith and the marrow of the monetary dis- cussions of the past twenty years. In all the European dis- cussions, after 1848, and prior to the German demonetization of silver and its consequences, the point made was not that either metal had depreciated relatively to the other, but that, by reason of extraordinary supplies of gold from California and Australia about 1865, and by new supplies of silver from Nevada, both metals had depreciated relatively to commodi- ties, and that kings, princes and office-holders, having fixed incomes, and the creditor class, having fixed annuities, were being injured by a rise in the price of labor and com- modities." The labor and producing classes were getting the better of the idle, non-taxed and non-producing classes. So long as the double standard existed, a new supply of either metal was an addition to and only affected the general mass of money, and not the relative value of the metals. The " fall in gold," which Chevalier lamented in 1857, was its fall in relation to property. In order, therefore, to protect the " in- come classes," it was claimed to be necessary to demonetize one of the metals, and gold — being the metal which then promised the most abundant yield — was selected for that purpose. 96 OUR MONEY WARS. 1860. The War Panic. — The panic and crash of i860, dur- ing which over 6,000 business failures tooli place, was caused by the loss and contraction of nearly all our Western currency, by failure of banks based upon Southern State stocks. After the Greenback era of 1862, the number of failures diminished, with the increasing of the currency ; and when contraction began in 1866, the failures began to increase again, and kept even pace with such contraction. The State bank money had been a great nuisance. Be- sides its inherent weakness, it was terribly counterfeited. Some idea of the extent of the evil may be gained by ex- amining the following table, taken from Shuckers' " Life of Salmon P. Chase." It shows the monetary condition of the United States in 1862 and six years previous : 1S56. 1862. Whole number of banks 1,409 i,Soo Number whose notes were not counterfeited. . 463 253 Number of kinds of imitations 1,462 1,861 Number of kinds of alterations 1,119 3,°39 Number of kinds of spurious. . . ._ 224 1,685 The Patient Pack-mule — the burden-bearer — the Treasury note — is now trotted out again, and is destined during the w'ar to do greater service than any Government money ever did before. The Act of December 17, i860, provides for the issue of $10,000,000 Treasury notes — to run one year,- and bear six per cent, interest. The interest was to run, and the notes to remain out, until sixty days after notice w.is given by the Secretary of the Treasury that he was ready to redeem them. They were to be paid at par to the public creditors, and wei'e to be legal tender for all debts due the United States. Some of these notes were to be- used in replacing those which had been redeemed and destroyed, as provided for in the Act of June 22, i860. Stephen Colwell, of Philadelphia, spoke thus in his " Ways and Means of Payment," in i860: — The common phrase that our bank circulation is based on gold and silver is abso- lutely untrue. If our paper currency had no other basis than this very uncertain, insecure and ultimately impossible con- vertibility, it could not be upheld for a week, nor even a day. OUR MONEY WARS. g; The real basis of our paper currency — that which does sus- tain it through extraordinary emergencies — is the individual promissory notes and other evidences of debt, in exchange for which it is issued. These must all be paid, or the debtor must fail or suspend. * * * The real strength of the banks is in this, — that their business is founded on the trade and in- dustry of the country. And all the business men, with all the commodities of daily consumption in their hands, are under the strongest inducements to offer these commodities for the notes and deposits of the bank. * * * The obliga- tion to pay specie on demand can be nothing more than a check on the abuse of banking, or a security to the public ; and as such only should it be regarded and discussed. If it be indispensable, it is upon the ground that no other adequate security is attainable. We do not believe this ; and regard this attempt to place the credit system on the back of our coinage system, as partaking of that caution and wisdom which should place a locomotive for its best service upon a one- horse cart. As we are approaching the time of war bonds and cur- rency, when we were dosed with 15 kinds of money, while the plain Treasury note, receivable for all public and private debts, would have been infinitely preferable, I will give a brief advance synopsis of the issues ; as they are calculated to puzzle the most acute, and were intended to. Let it be remembered that the acts mentioned simply " authorized " certain issues. In many cases but a ' small portion of that authorized was issued. Act of February 8, 1861. A six per cent. 20 year loan of ^20,000,000. Act of March 2, 1861. A six per cent, issue of $35,000,000 Treasury notes, payable in three years. Act of July 17, 1861. For $250,000,000 seven per cent. 20 year bonds. Any part could be issued in three year Treasury notes at 7.30 interest ; or non-interest Demand notes, or one year Treasury notes at 3.65 interest, exchange- able for 7.30 notes. All demand notes not to exceed $50,000,000. . Act of August 5, 1861. Issue of six per cent. 20 year bonds, to exchange for one year and three year notes at any time. 98 OUR MONEY WARS. Act of February 25, 1862. For ^500,000,000 six per cent, bonds ; the 5,203. Also ^150,000,000 Treasury notes, $50,- 000,000 of them in place of the Demand notes of July 17, r86i ; to which $10,000,000 was added by Act of February 12, 1862. Act of July II, 1862. For $150,000,000 more Treasury notes, and of March 3, 1863, $150,000,000 more, making $450,000,000 in all. Act of February 25, 1862. For $25,000,000 "deposits " at five per cent. This was raised to $50,000,000 by the Act of March 17, 1862, and to $100,000,000 by the Act of July 11, 1863 (January 30, 1864, $50,000,000 added at 6 per cent.). All this called " temporary loans " was to be repaid on ten days' notice. Was mostly funded in 1865, 1866. Act of March i, 1862. For one year debt certificates to creditors at six per cent. These were issued for army supplies, to the amount of $561,753,241, and all but $4,000 was funded or replaced otherwise in 1863, 1864 and 1865. Act of July 17, 1862, made postage legal tender in sums less than $5.00. Act of March 3, 1863, confirmed June 30, 1864, gave $50,000,000, fractional currency. $46,000,000 was out January I, 1873- Act of March 3, 1863. For a $900,000,000 loan at six per cent, for 10 to 40 ye.z.rs, principal and interest payable in coin. This was the first issue of anything payable in coin since the Demand notes. That the people generally were not bother- ing about coin is shown by the fact that only $75,000,000 was issued, and the law was repealed June 30, 1864. The few long-headed, long-nosed men who bought them paid, however, a premium of 3}^ to 4 per cent. The "orthodox" historians say : " A preference was given because of a pos- sible distinction existing adverse to the payment of the 5-20S in coin." The same act authorized $400,000,000 of one, two and three year Treasury notes, at not over six per cent. — princi- pal and interest payable, as usual, in lawful money. There was an over-issue of these — in all they were $477,595,440, mostly at five per cent. The same act authorized the issue of new Treasury noies for any of these issues outstanding at anytime and bac!:y OUR MONEY WARS. 99 worn, and provided for $150,000,000 more of non-interest notes to facilitate tlie excliange. Treasury notes were all the vogue in 1863. Act of March 2, 1864. A loan of $200,000,000 at five or six per cent, principal and interest in coin. These 10-40S of 1864 nearly all went at five per cent, and brought from one to seven per cent, premium. Act of June 30, 1864. The S-20S of 1864 drew six per cent, interest, and were payable in lawful money. The issue was $125,561,300. The same act authorized $200,000,000, 7-30 Treasury notes to ran three years (Act of March 3, 1865 extended this to $600,000,000). Of these 7.30 interest-bearing Treasury notes $829,992,500 were issued. All were funded before July 15, 1868." Act of March 3, 1865. For $600,000,000 six per cent, bonds to fund Treasury- notes and other obligations. July I, 1865, of this $322,998,950 was issued, and November i, $203,327, 250. In all $526,326,200. By authority of the same act as construed by the Act of April 12, 1866, a further issue was made in July, 1867, of $379,616,050 and of $42,539,350 on July i, i868-^making $948,481,600 under this act. They are called " consols of 1865, 1867 and 1868." Act of March 2, 1867, $50,000,000 three per cent, tempo- rary loan certificates of deposit were authorized to redeem compound-interest notes. Act of July 25, 1868, authorized $25,000,0,00, more. Under these Acts $85,150,000 was issued. The Act of July 14, 1870, provided a billion and /i, half re- funding bonds, viz. ; $200,000,000 fiv& per cents. $300,000,000 four and a half per cents, and $1,000,000,000 four per cents. They were 30 year bonds, and the "Credit Strengthening Act " having paved the way, with infernal ingenuity, were payable, principal and interest, in coin. As silver was still at three per cent, premium there was no discussion then about gold. But 187 1 was to see the beginning of the plot in Europe to break silver down. The Act of Jan. 20, 187 1, increased the five per cents, by $300,000,000, interest payable quarterly. Act of July 12, 1882, produced $254,808,650 three per cents. OUR MONEY WARS. CHAPTER XII. 1861 to 1866. WAE. 1861. The Act of February 8, i86i, authorized the issue of Treasury notes, or a loan of $25,000,000, to take up Treasury notes. One of those acts that leave all discretion to the Treasurer. The Act of March 2, 1861, provides for a loan of $10,000,000 to lake up Treasury notes and for the expenses of the Government. If the bonds could not be sold, then the Treasury notes were to be issued and relied upon. As Jef- ferson says, they are always a safe reliance. The revenues of the Government, excepting those required to support the Government, are pledged for the payment of the bonds and the Treasury notes. If bonds were sold, they are to be re- deemable in ten and payable in twenty years. The Yale JJen is " On ! " — The great Civil War was now begun, and the nation eatered upon what Sumner of Yale (for once) properly describes as a series of temporary financial make-shifts. This weak way of meeting the emergency was caused by the interference >0f such men as Sumner with the wise and energetic' plans of such true leaders as Thaddeus Stevens and Henry Wilson, in Congress. If Sumner had lived 1,000 years ago, he could have found some justification of his position. He even doubted the need of paper-issues during the war. Positively, the only place in his " Cur- rency " that I notice, in which this " guardedly conservative " oracle admits the possibility of paper money is this at page 196 : " The economy of convertible [mind you, not inconverti- ble. — S. L.] paper issues is assumed and repeated by many persons who have never taken the pains to analyze that econ- omy ; to see wherein it consists, and how great it is. / am not prepared to take total abstinence ground against paper issues, OUR MONEY WARS. 1 01 because I believe that they can be made useful, and eco- nomical ; thougli we have not yet learned to do it." When- ever the Yale pundit has hatched out this egg, we will doubt- less hear him cackle. Until then, no more paper issues ! Let the world stop and speak in whispers ; and say, with bated breath, " Whist ! The Yale hen is on ! " Immense Issues of Money. — In the summer of 1861, the war money begins to assume enormous proportions. The Act of July 17, 1861, authorizes a loan of $250,000,000, or the issue of Treasury notes bearing 7-30 interest ; or if bonds are issued they are to be at seven per cent., redeemable in twenty years, at the pleasure of the Government. This act is also first to provide for the issue of Demand notes, payable in coin, of a denomination of not less than $10. All notes of larger denomination than $50 were to bear interest. The law provides that these notes might be paid to Government employees and officials : but they were not then made legal te7iderfor duties. The banks not having yet suspended, these notes were forced by the banks and brokers to a discount, though they were payable and paid in coin, when coin was demanded. These notes were receivable for bonds. The bonds were redeemable in ten years, and payable in twenty years. Seven-Thirties and Demand Notes. — The Act of August 5, 1861, provides for the investment of 7-30 notes, which were not, under these acts, legal tender, in six per cent, bonds, not redeemable until 20 years. This also provides for the issue of Demand notes in denominations of not less than $5, to the extent of $50,000,000. They are made re- ceivable for " public dues ", but what dues are not stated. The first authority to issue them, as we have shown, did not specify for what particular payments they were to be received. This is more definite, but not full. But as the law suspends the Act of 1846, so as to allow deposits to be made by the Secretary of the Treasury in banks, it was construed to ex- clude these Demand notes from the custom-house, the same as bank notes. They, therefore, went to a discount. But when the Secretary of the Treasury ordered them received for duties, they immediately went to par with gold, though they were not by law legal tender at that time. The, above suspension of the Act of 1846 was engineered by the banks for their special benefit. I02 OUR MONEY WARS. Warwick Martin says : " Shylock's conspiracy, during the war, began when the banks, in 1861, tried to compel the re- tirement oftlie Demand notes," The New Yorli banks suspended Dec. 31, i86r. Wm. A. Birkey, in his valuable book " The Money Ques- tion," says of the Demand notes : — These notes were receivable for all public dues, duties on imports included, and were subsequently made a legal tender for private debts , and the result was that they commanded the same premium over the ordinary Greenback that gold did ; and went up with gold, step by step, to the enormous premium of 285 ! Could any better evidence than this be required, to prove that a Greenback, made a full legal tender, would circulate at par^ or nearly so, with gold ? The Demand notes were, of course, very obnoxious to the bull- ionists : because they gave the lie to all their theories about paper money : and accordingly they were got out of the way at the earliest moment possible, — all except about ^75,000, which are probably lost ; and, if such is the case, constitute a gain of that amount to the people at large. It is ever memorable that these notes vere not at par because they were payable in coin ; but for the reason that they were receivable for duties on imports, and all other debts due the Government. So long as they were not so receivable, they were at a discount, though payable in ■ coin. 1862. Legal Tenders Now First Repudiated by Govern- ment. — Never until 1862 was the power of the Government to make its own paper money, or that of the banks, legal tender for all payments to the United States, denied. The evil consequences of this denial and prevention have been hideous. In January, 1862, Edward Bates, U. S. District Attorney, delivered this opinion : — The Constitution contains restric- tions upon States. * * * No State can make anything but gold and silver coin a tender in payment of debts. This applies to a State only, and not to tlie nation ; and thus it OUR MONEY WARS. 103 has always been understood with regard to the next preced- ing clause in the same section — no State shall " emit bills of credit." The prohibition to emit bills of credit is quite as strong as the prohibition to make anything but gold and silver a legal tender ., yet nobody doubts — Congress does not doubt its power to issue bills of credit. Treasury notes are bills of credit ; and I think the one is just as much prohibited as the other — neither is forbidden to Congress. In January, 1862, the banks of New York, Boston and Philadelphia combined to prevent the passage of the Legal Tender Act, and sent delegates to Washington for that pur- pose. Debates were hot and heavy in Congress on the money question, early in this year. \Vm. Fessenden was a speci- men " Conservative." After arguing that the war would be over by the end of the year, he proceeds to say, in a special argument in favor of paying the interest of the U. S. bonds in gold : " We shall have a heavy capital of debt, but all that is necessary is to s^icure the payment of the interest. A public creditor looks not for the principal. * * * He wants to know what his interest will be. The example of England proves this abundantly. Nobody suppjDses that England wiir ever pay her debts; nobody has supposed it for years ; and yet her stocks arc always sound, and are sought for even at a very low rate of interest." This is the high-toned repudiator who was afterwards called to be Secretary of the Treasury. For a time, patriotism prevailed. A full legal-tender bill passed the House February 6, 1862. The vote was 93 to 59. The full legal-tender bill passed the Senate February 12, 1862. The vote was 30 to 7. The Act of February 12, 1862, provides $10,000,000 additional Demand notes, in the same form as the $50,000,000 of August 5, 1861. Secretary Chase was terribly in want of money, and was getting behind in his payments. We learn, from Spaulding's " Financial History of the War," that 104 OUR MONEY WARS. Chase was sending pitiful appeals to Congress, to hurry up some sort of a big issue of Treasury notes. The struggle was terrific. On February 20, 1862, Thad- deus Stevens — the leader of the money reformers — uttered " a great and bitter cry." He said of the Senate amend- ment, that struck out the legal-tender clause of the House bill : " I have a melancholy foreboding that we are about to consummate a cunningly-devised scheme, which will carry great injury and great loss to all classes of people throughout this Union. * * * There was a doleful sound came up from the caverns of the bullion brokers, and from the saloons of the associated banks. * * * It now creates money ; and by its very terms declares it a depreciated currency. It makes two classes of money — one for banks and brokers — another for the people." On his deathbed the "Great Commoner" said; "Yes, we had to yield. The Senate was stubborn. We did not yield, however, until we found that the country must be lost or the bankers gratified ; and we have sought to save the country, in spite of the cupidity of its wealthier citizens." Again (he died before the panic of 1873): "When, a few years hence, the people shall have been brought to general bankruptcy, I shall have the satisfaction of knowing that I attempted to prevent it." Senator Henry Wilson of Massachusetts said : " I venture to express the opinion that 99 out of every 100 of the loyal people of the United States are for the legal-tender clause. I do not believe that there are 1,000 people in the State I represent who are not in favor of it. The entire business community, with hardly a single exception, — men who have trusted out in the country, in commercial transactions, their tens and hundreds of millions. — are for the bill with the legal-tender clause. Yes, sir, the people in sentiment ap- proach unanimity on this question. * * * I believe that no measure that can be passed by Congress, unless it be a bill to provide revenue to support the Government, will be re- ceived with so much joy as the passage of this bill, with the legal-tender clause. In my judgment, if you strike out the legal-tender clause, you will have every curbstone broker in the country, the bulls and bears of the Stock Exchange, and all that class of men who fatten on public calamity and the OUR MOJVEY WARS. loj wants and necessities of the people, using all their influence to depreciate the credit of this Government, and break down the value of the Demand notes. * * * I have received sev- eral letters from my own State on the subject, — one, a day or two ago, signed by several large commercial houses, repre- senting millions of capital, — and from others ; and they say to me that they do not know a merchant in the city of Boston, engaged in active business, who is not in favor of the legal- tender clause." That extraordinary man, E. G. Spaulding, was like John Sherman, a true Greenbacker at first. Indeed, he originated the Greenback and the five-twenty. But he was seduced, or rather overborne, by the money-power. Like many another, he saw, after a hard fight for true money, that he would have to give it up, or retire from public life, and the prospect of wealth. So he went with the tide — heroes and martyrs are scarce now. He said at this time in Congress : — Congress may decide whether it will authorize the Secre- tary of the Treasury to issue demand Treasury notes, — and make them a legal-tender in payment of debts, — or whether it will put its six or seven per cent, bond on the market, at ruin- ous rates of discount, and raise the money at any sacrifice the money-lender may require, to meet the pressing demands upon the Treasury. In the one case, the Government will be able to pay its debts at fair rates of interest ; in the other it must go into the streets shinning for the means, like an individual in failing circumstances ; and sure of being used up, in the end, by the avarice of those who exact unreason- able terms. But, sir, knowing the power of money, and the disposition there is among men to use it for the acquisition of greater gain, I am unwilling: that this Government, with all its immense power and resources, should be left in the hands of any class of men, bankers or money-lenders, how- ever respectable and patriotic they may be. The Govern- ment is much stronger tlian any of them. Its capital is much greater. It has control of all the bankers' money, and all the brokers' money, and all the property of the 30 millions of people under its jurisdiction. Why, then, should it go into Wall Street, State Street, Chestnut Street, or any other street, begging for money ? Their money is not as secure as Government money. All the gold they possess would not carry on the Government for 90 days. They issue only prom- lo6 OUR MONEY WARS. ises to pay, which, if Congress does its duty, are not half as secure as United States Treasury notes, "based on ade- quate taxation upon all the property of the country. After his back-down, Spaulding sang a different song. He saw that if he remained an honest reformer, and did not swing with the tide, he must " have nothing and be nothing." So he went with the tide ! And said that the Greenback must go ! What a change occurs ! He eulogizes the legal tender ; but revels in the prospect that the Greenbacks will soon be withdrawn, and their places taken by the National, bank cir- culation ; argues the superiority of the latter over the former because, while the Greenbacks were only backed by the responsibility of the nation, the National bank notes will have the additional guarantee of the banks ! With the most charming naivete he says : " Legal tender notes issued direct from the Treasury constitute a loan to the Government, without interest. Bank notes, under this bill, would be loaned to the Government and the people at six and seven per cent, interest. \\(t give to the banking associations the interest on the National currency (354 million) issued by them, as an inducement for them to form associations, and be liable for its redemption." The Mutilated Legal-Tender Act was Finally Passed, February 25, 1862. — This is the first legal-tender act. It provides for the issue of $150,000,000 legal-tender notes, $50,000,000 of which were to be used to redeem $50,000,000 Demand notes, which were then at a discount. The issues under this act were viade legal tender to the Government and the people for everything " excepting duties on imports and interest on the public debt." Had they been made legal tender for everything, they would never have been at a dis- count. This would have saved $1,000,000,000 to the public. These notes, under this law, were made receivable for " bonds the same as coin." The bonds issued under this act were to be 5-20 bonds — redeemable in five and payable ia 20 years, in lawful money, meaning legal-tender notes. This act also provided that the Government shall receive de- posits of sums of $100 and over ; and shall give convertible receipts or certificates for this money. And after ten days' notice the holders of the certificates could receive this OUR MONEY WARS. 107 money, principal and interest. The amount to be thus re- ceived on deposit was $25,000,000 only, under this act. The limit was soon full. The certificates were as good as money when held by the people ; and the Government had the use of the money in time of need. The rate of interest should have been only three per cent., instead of five. Duties on imports were to be paid in coin and Demand notes, as pro- vided in this act. The coin was to pey interest on bonds or on interest notes, and used to reduce the bonded debt one per cent, per annum. The balance was to be carried into the Treasury. February 25th, 1862, was a very important day for the United States. We give here an allegorical description of some of the results of that day's botched work. B. S. Heath, the author of " The Labor and Finance Revolution," who was editor of the Chicago Express, at the time of his death, had a very lively and spicy style. Several extracts from his book will be found in this work. The fol- lowing specimen will illustrate his peculiar style : — The Great National Bear : — It is related that in the Canton of Berne, in Switzerland, it had been customary, from time immemorial, to keep a bear at public expense ; and the people had been taught to believe that if they had not a bear on hand they would be undone, and the country would go to wreck and ruin. So they endured the bear, not- withstanding the expense, and the fatal injury that he in- flicted upon pigs and children that happened to step over the line of his jurisdiction. It happened one day that bruin sickened and died, too suddenly to have his place immedi- ately supplied with another. During the interval, the people were amazed and delighted to see that the sun con- tinued to shine, the corn to grow, and the vintage to flour- ish ; and everything went on the same as before — saving the danger and expense of the bear. So they came to the sensible conclusion not to keep any more bears. With no more sense, and at much greater expense, the civilized world has been harboring and keeping a bear for the last 2,000 years. Every civilized nation has had its bear. Our Revolutionary fathers repulsed the British lion, but accepted the embrace of the English bear — specie-basis. It has been an expensive and dangerous beast to keep. In 1809, its depredations occasioned great public distress; and Io8 OUR MONEY WARS. in several instances involved the entire country in bank- ruptcy and ruin, from which it took years to recover. In 1814, 1819, 1825, and at other periods, the beast got on his periodical rampage producing the most terrible and disas- trous results. But the bear must be kept, or we, like the peasants of Berne, would be undone. He was the idol of civilization. To him society offered up its sacrifices, with the same devotion that the Hindoo mothers yield up their babes to the crocodiles of the Ganges. One day he sickened and died. It was on February 25, 1862. Devout worshipers from Boston, New York and Philadelphia flocked to Washington, to weep and howl over his untimely death. They were frantic and inconsolable. They feared the sun would cease to shine, the crops to grow, or the tide to ebb and flow. But time passed on. The sun kept its course. The seasons came and went, just as of old. People prospered, as they never had before. Men grew rich. Labor was fully employed, well-paid and not molested. Civilization extended, and the wilderness disappeared. The rose blossomed where the tangle-bush had grown. Railroads spanned the unknown waste. The march of improvement kept time to the music of machinery and the hum of in- dustry. There was no bear to molest or make afraid. Still, idolatry, like the old man of the sea, clung to the public mind. Men could not believe that prosperity without gold could be real. They prayed for the return of their idol, and warned society that for all its seeming prosperity, and delusive dreams of wealth, corresponding sacrifices must be made to their idol, or the country would be a howling bed- lam of madmen and fanatics. So, on April 12, 1866, keeper McCulloch was ordered to begin negotiations for a bear. Immense sacrifices of men and property followed. The next year 2,000 men fell, and over $80,000,000 were lost. Each succeeding year the num- ber of human sacrifices increased, and the amount of pecuniary loss augmented, until the reinstatement of the beast in 1879 ; 10,000 men and firms having fallen and $300,000,000 of wealth being sacrificed in the previous year. Now we have our blood-thirsty god reinstated, and John Sherman as high priest. [He should have added that the victims were numbered by millions, and the losses by annual billions, through the general stoppage of industries. — S. L.] OUR MONEY WARS. log " The Origin and History of Five-Twenty Bonds," Act February 25, 1862, is given at length by John G. Drew, in his " Money Muss." He shows how, after Mr. Spaulding had, on January 7, 1862, reported a bill for $100,000,000 full legal-tender Greenbacks ; and Attorney General Bates had en dorsed their constitutionality, the money monopolists " felt the same solicitude as to the profits resulting from ' measures of value ' as you would for your monopoly of the pint-pot, if you owned the only one existing; and you learned that it was the intention of Government to multiply such measures to such extent as the requirements of the commun-ity might indicate." He describes the delegation of bankers, and how they seduced Mr. Chase, and shows how the Com- mittee of Ways and Means — E.. G. Spaulding, Samuel Hooper and Erastus Corning — opposed them, and re- ported the original bill 240, for the issuance of Greenbacks and funding them in 5-20 s. A large quotation from Mr. Drew's book will be found at the date when Grant signed the bill that made the 5-20S. payable in coin. Spaulding's History [1869] thus describes the certificates authorized February 25, 1862 " They were to be issued to creditors, in sums under $1,000, payable in one year at six per cent. And, by Act of March 17, this power was en- larged, so as to embrace checks drawn in favor of creditors by disbursing officers, upon sums placed to their credit in the books of the Treasury. The power thus conferred upon the Secretary of the Treasury, to issue certificates, was broad and unlimited. " The certificates issued under these acts were in the simili- tude of bank-notes, fitted for circulation as money, and did circulate to a considerable extent as currency, until there was such an accumulation of interest upon them as to make it an object for capitalists to hold them as an investment. " The Secretary began issuing certificates simultaneously with the issue of Greenbacks, and continued to issue them, in large amounts, during the progress of the war. This was advantageous to the Government, but was, at the same time, another fruitful source of inflation, and operated directly against any considerable funding in the long 5-20 bonds." Loan Certificates. — The Act of March 12, 1862, pro- vides for the issue of $50,000,000 additional temporary loan certificates, which would tae redeemed in legal-tender notes no OUR MONEY WARS. upon ten days' notice. Why not issue the legal-tender notes in place of the certificates, and save the interest ? If these certificates were not presented for one year, they were to bear six per cent, interest. They were to be paid out to public creditors. Why not pay out the legal-tender notes to said creditors ? Well, the American public was being thus gradually, painfully and expensively educated by fifteen kinds of paper money up to an understanding and appre- ciation of fiat money. The process is slow. A majority believe in it now ; but they have not the spunk to vote for it. Demand Notes Full Legal Tender. — An Act of March 17, 1862, made the Demand notes legal tender for every-, thing — which they had never previously been. The Secre- tary of the Treasury was ordered to reissue Demand and legal-tender notes upon their coming into the Treasury. He was to exchange new for old and defaced notes. The old ones were to be destroyed. The Hazzard Circular. — An apparently authentic cir- cular of the summer of 1862 has long been kept in print and " in stock " by the labor and money reform papers. It is called " The Hazzard Circular," and is thus described : In the summer of 1862 the money monopolists of London saw an opportunity to extend their system to this country, and accordingly embodied their scheme in a " confidential " cir- cular, and commissioned one Hazzard, a London banker, to propagate it among the American bankers, with a view to having the finance legislation of Congress pave the way for its final adoption as the settled policy of the nation. Here it is : " Slavery is likely to be abolished by the war power, and chattel slavery to be destroyed. This, I and my Euro- pean friends are in favor of. For slavery is but- the owning of labor, and carries with it the care for the laborer, while our plan is for capital to control labor by controlling wages. This can only be done by controlling the money. " The great debt that capital will see to it is made out of this war, must be used as the means to control the volume of money. To accomplish this, the debt must be bonded, and the bonds must be used as the banking basis. " We are now waiting to get the Secretary of the Treasury to make the recommendation to Congress. It will not do to allow the Greenbacks to circulate as money for any length of OUR MONEY WARS. Ill time ; for we cannot control them, but we can control the bonds, and through them the bank issues." July I, 1862, B. S. Heath, in " Labor and Finance," gives as already issued of Seven-thirties, $123,000,000, and of Green- backs, $151,000,000, and of temporary ten-day loans and one-year certificates of indebtedness, $108,000,000. Postage Legal Tender. — The Act of July 17, 1862, makes postage stamps legal-tender money for I5, and re- deemable in legal-tender notes, in sums of $3 and upward. They were to be sold by Government officials for legal-tender notes at par. This act also provides that after August i, 1862, no bank, corporation or individual should issue any note to circulate as money under one dollar, upon pain of fine or imprisonment. Large and Small Greenbacks. — Several writers give the issue of $150,000,000 legal-tender notes as under an Act of July II. Martin gives it thus : — Act of August 5, 1862 (Statutes 12, p. 532). This law authorized the issue of $150,000,000 legal-tender notes, of the same character as the first issue, which were to be received for bonds ; and also authorized the issue of bonds which were payable in legal tenders. This issue added to the first made $300,000,000. Had these notes been made full legal tender, and issued up to $1,000,000,000, they would have been always at par with coin, and our debt would have been small. $35,000,000 of this issue was in small notes — a very im- nortant and desirable act. And now gold was going up. In October it reached $1.33. Who Bought the Five-Twenties. — W. A. Birkey, in his " Money Question," gives this testimony about Hugh Mc- Culloch and the 5-2 os. : — McCulloch bears testimony as to what class of people took the 5-20 bonds. In a letter to the N. Y. Tribune, dated at London, in September, 1875, he said : " I recollect the time when subscribers for U. S. bonds were regarded as patriots ; and I happen to know to what class they belonged. With k'are exceptions, they were not capitalists.* * * The purchasers of our bonds were the patriotic men and women of all parlies ; chiefly men of moderate means ; who were resolved th.U Ll.c 112 OUR MONEY WARS. Union should be saved, no matter at what cost of money or blood." It may be interesting to state that McCulloch was not one of those who were resolved that the Union should be saved, no matter at what cost, etc. At that time he was a country banker, " of moderate means," somewhere in the State of Indiana ; and was solicited, we believe by the Sub-Treasurer of the United States, Mr. Cisco, to have his bank take and dispose of some of " our bonds." He treated the request with contempt. This matter was so well known at the time of his appointment, as Secretary of the Treasury, as to be talked of on the streets of Washington ; and was hushed up by his friends, only with great difficulty. The following item, as to a later date, throws a lurid light upon Mac's patriotism : " Judge Strong's decision in the case of the United States against Edwin R. Lewis, trustee for the creditors of Jay Cooke & Co., draws attention afresh to the transactions between Secor Robeson and McCulloch. The London house of Jay Cooke, McCulloch & Co. appears to have been set up on public funds advanced by Robeson ; and is admitted to have depended for its continuance on addi- tional deposits by him, amounting to at least $1,200,000 ; against which iron rails worth about half that amount were hypothecated." 1863. Spaulding says that up to January 12, 1863, only $25,000,- 000 Five-twenties had been sold ; because Greenbacks were still scarce, and the people did not want to part with them. National Banks Authorized. — The Act of February 25, 1863, authorizes the National banking system now in exist- ence. The bill was introduced by Senator Sherman, who assigns reasons why the notes of these banks should take the place of legal tender notes. He said that the latter' should and would be all destroyed. His reasoning was fallacious, and time has shown his conclusions false. The status of the National bank note is shown by its in- scriptions. At the top is this: "This note is secured by bonds of the United States deposited \\ith the U. S. Treasurer at Washington." At the center is this : " First N. bank of will pay dollars to bearer on demand." On the back is : " This note is receivable at par in all parts of OUR MONEY WARS. 113 the United States in payment of all taxes and excises and other dues to the United States, except duties on imports. And also for all salaries and other debts and demands owing by the United States to individuals, corporations and associ- ations within the United States, except interest on the public debt." Here are Sherman's words in the Senate when introducing the National Bank bill : " Another objection is, that they can only be used during the war. The very moment that peace comes, all this circu- lation that now fills the channels of commercial operations will be at once banished ; they will be converted into bonds; and then the contraction of prices will be as rapid as the in- flation has been. The issue of Government notes can only be a temporary measure, and is only intended as a tempo- rary measure to provide for a national exigency. * * * But it is asked, why look at all to the interests of the banks ; why not directly issue the notes of the Government, and thus save the people the interest on the debt represented by the notes in circulation ? The only answer to this question is that his- tory teaches us that the public faith of the nation alone is not sufficient to maintain a paper currency. There must be a combination between the interests of private individuals and the Government." Which is all false. The Law allowing the Interior Banks to keep Large Amounts of their Reserves in so-called Redemption Banks, or Banks in Money Centers. — The National banks in money centers are under great obligations to Mr. Sherman for putting this provision in the National Bank Act, as it afforded these banks the means of using larger sums of money which did not belong to them. It was used in making call loans to speculators in bonds, gold, and stocks. The coun- try banks are also under obligation to Mr. Sherman for allow- ing these banks in the money centers to pay them interest for the money thus kept by them. But the people of the interior had a right to complain that the money kept by their banks with banks in the money centers was thus withdrawn from the locality where it was needed in business : and kept where it was not needed, and could not be used to benefit the country ; but where it was used for speculative transactions only, 'to the derangement and injury of business generally. This law was wholly in the interest of banks and bankers, 114 OUR MONEY WARS. and against the interests of the people generally. What won- der that now, in 1890, the South is clamoring for State banks. The poorer money the notes of these banks are the surer they are to stay at home ! Any money is better than none. Spaulding gives the vote on the National Bank bill thus : Senate, yeas 23, nays 21 ; House, yeas 78, nays 64. A close shave. The Ten-Forties, Fractional Currency, etc. — Spauld- ing gives this synopsis of the Ten-forty Act of March 3, 1863 : The first section authorized a loan of $300,000,000 for the then current year; and $600,000,000 for the then. next fiscal year ; and to issue bonds therefor, at not less than ten nor more than forty years, at not exceeding six per cent, in coin : not exceeding, in all, $900,000,000. 2. By sec. 2, of the same act, the Secretary, in lieu of an equal amount of said bonds, was authorized to issue $400,000,000 of Treasury notes, bear- ing interest not exceeding six per cent, payable in lawful money ; which notes, payable in periods expressed on their face, might be made a legal tender at their face value. 3. By the third section $150,000,000 in amount of U. S. notes, made a legal tender, might be issued. The restriction in the sale of bonds to market value was repealed. And the holders of U. S. notes, under former acts, shall present the same for the purpose of exchanging them for bonds as therein provided, on or before July i, 1863 ; and thereafter the right to ex- change the same shall cease and determine, 7. This section imposed a tax of one per cent, each half year, on a graduated scale of State bank circulation ; according to the capital stock of each bank. I give this statement from Spaulding (who had become at the time of writing an enemy of Greenbacks and a friend of bank issues and bonds) as a preface to what certain friends of Greenbacks say. Judge Warwick Martin says : — The Act of March 3, 1863, is dated six days after the first National Bank Act was approved. It was intended to carry out Sherman's intention to retire the legal tenders. To do this the following points had to be covered : (i) Six per cent, bonds must be supplied in such excess as would make them dull and cheap for bank investment. So 900 rnillion 10-40S were issued, purchasable with legal tenders — bonds and interest payable in coin. Interest on these above $100 OUR MONEY WARS. IIS payable semi-annually — under that annually; thus giving preference to big buyers. (2) State bank and legal tenders and Demand notes must be squelched. So (a) State bank notes were taxed ten per cent, per annum, which drove them to turn to Nationals, (b) Legal tenders were to be refused for bonds after July i, 1863. This rushed the legal tenders into the Treasury — the people fearing their repudiation. They were not so received again until 1865. This hit them hard, and they went down to ^2.85 to $1 gold. But money was needed to pay the soldiers, at the end of the war-, and they demanded Greenbacks. So the law w^as repealed — that bonds might be bought with Greenbacks to supply means of payment. This was one of the darkest acts of our history. Wall Street made fortunes out of it, by purchasing the legal- tender notes and holding them ; and investing in bonds at $40 in the $100 for gold, as soon as they were again receiv- able, (c) Fearing the people would still not buy the bonds, Sherman provided in the act for 400 million three-years six per cent, notes, payable in legal tenders and themselves full legal tenders. If these were issued only 500 million bonds were to come out. The latter would gi\-e a basis for National banks — the former would redeem the legal tenders, and then be funded. A cunning scheme ; but it failed. The people clung to the legal-tender Greenljacks. Sherman showed liis crafty hand in the section of the act demonetizing the legal tenders, — just as he did later, in the act demonetizing silver. In both cases, it takes a Philadelphia lawyer to see the trick. To insure the reception of the three-years notes, they were made convertible into legal tenders ; and to cover this scheme, the act authorizes 150 million more legal tenders to redeem three-years notes when presented , but not to be issued for any other purpose. The act also provides, on a large scale, for the issue of in- terest certificates for temporary loans. All the laws passed at this time sought to convert the non-interest debt of the nation — which was used as money — into an interest-bearing debt. So the suffering people were loaded up. One redeeming feature of the act gave us 50 million frac- tional currency. But the same crafty hand pulled that in, January, 1875 ; and substituted silver, at an annual cost of Il6 OUR MONEY WARS. $2,500,000 ; to the disgust of the people, and the profit of the five per cent, bondholders. Tricks that were Not Vain. — A very brief and pointed epitome of the financial scull-duggery of this year is given in this extract from John Sherman's report as chairman of the Senate Finance Committee. This is written " as with lead in the rock forever," in the minds of all true money reformers : " It became necessary to dep7-cciate the notes in order to create a market for the Bonds. The limit of the notes was trebled and the right to convert them taken away." Yet, in spite of all these tricks, it was hard to get the legal tenders away from the people. No nation, before or since, ever had a sufficiency of good money. The consequent prosperity was enormous. For once, our people were, like France, doing business with money, instead of the usual vast preponderance of promissory notes and checks, in the Eng- lish style. At the time of this writing, the city of New York enjoys, for the first time in many years, a full supply of water ; enough to reach all the top floors of four-story houses. Such was the condition of this country as to currency in 1864 and 1865. For once, the outlying rural districts had money enough to do business with. But, as usual, the dealers in money and securities made the big rake. Those who had money, and knew that after the close of the war the law would be repealed, purchased the legal tenders at the heavy discount — they costing them not more than $40 on the $100, in coin — and invested them in six per cent, bonds, under the management of Secretary McCulloch. There is nothing in the financial history of the United States of which the people had, and have, greater cause to complain than this law and its effects, and none for which the bondholders, capitalists, and national bankers had, and have, more cause to feel grateful. The passage of this Act of March, 1863, was the most effectual plan that could have been adopted to carry out the policy of crushing the legal-tender notes — first introduced in favor of National banks in the speech of Mr. Sherman, in February, 1863. But this, as well as all other efforts, failed. The people still confided in legal-tender notes, as the best money they could have, notwithstanding these combined efforts to destroy them. OUR MONEY WARS. 117 All branches of business flourished in a healthy way ; every one was paying off old debts and mortgages. The condition and prospect was disgusting only to money- lenders. The scheme for getting out the five-twenties at last began to work, by help of' Jay Cooke & Co. Spaulding gives July I, 1863, $168,880,250 of S-20S sold ; October i, $278,- 511,500 ; and January 21, 1864, $500,000,000, and $11,000,000 over. By the Act of July ii, 1863, the ten days loans, that were raised from $25,000,000 on February 25, 1862, to $50,000,000 on March 17, 1862, are raised to $100,000,000. Such were the temporary makeshifts during the great war. B. S. Heath gives the paper currency outstanding July i, 1863, as follows : Old Demand and Treasury notes of the time before the war (I give only millions) one million : ten- days loans and certificates, 259 millions; seven-thirties, 140 millions ; non-interest, demand and legal-tender notes, 382 millions ; fractional currency 20 millions ; and State bank notes 239 millions ; or about 1,041 millions in all. The same writer gives this list of State bank money from 1854 to 1863: 1854, 205 millions; 1855, 187; 1856, ig6 ; 1857, 215; 1858, 155; 1859, 193; i860, 207; 1861, 202; 1862, 184 ; and 1863, 239 millions. In October, 1863, gold reached 1.50. Sarsaparilla Townsend's Wisdom. — One of the most remarkable cases of early illumination upon the money ques- tion was that of Dr. S. P. Townsend. This noted man made a fortune and did a public service by popularizing sarsaparilla. Clear back in 1863, he knew nearly all that we do now about this question. Many will remember the " palace " he built on Fifth Avenue, New York, where that of A. T. Stewart now stands. It was one of the joys of Stewart's life to pull it down and build a finer one on the same spot. As to Townsend's career, he shall speak for himself. His able and well-informed brother, Tappen, first indoctrinated me in " currency reform ", and has fought a good fight in the cause, even unto death. In a speech before the Union League of New Providence, Il8 OUR MONEY WARS. N. J., November 9, 1863, Dr. Townsend went over the ques- tion very thoroughly. Here are some of his points : He said that when the first Sumter gun was fired, he was build- ing fifty large houses on Murray Hill, New York. His vent- ure was prostrated as by a tornado. But a new tariff and a new currency set business a-going again. Capitalists who do not think that the country is safe unless money is tight and merchants in distress, and dealers in cotton that is marketed in England like to have money scarce in America. Already he saw Mr. Chase shivering in terror, like Frank- enstein, before the mighty genii, the Greenbacks and Demand notes, that he had created. But he informed the Secretary that the time was passed for this country to be ruled with a rod of gold " more powerful, more cruel than a rod of iron." He was wise about the price of gold, and said : — The high premium on gold has indisputably been of incalculable value to the country ; it has certainly prevented excessive impor- tations of foreign goods; and enabled our people to export hundreds of millions of dollars in value of the products of the country, which, with gold at par, would have remained at home. Sir, while men are eager to sell marble stores in Broadway and Wall Street for a less price (and take pay in Greenbacks) than the same property would have sold for before the suspension of specie payments', I cannot be made to believe that this money is depreciated. The same is true of Brooklyn property, and of farms in any direction within fifty miles of the great metropolis. * * * The owners of coal-fields and the stock-holders of the railroads and canals leading to the mines form a combination, taking advantage of the requirements of the Government and people, and ask an enormous price for coal. Is it the Greenbacks or the ex- tortioners that should be censured ? Monopolists can in- crease the price of any article, including gold, at pleasure. * * * It is curious but true, that it requires as much nerve and courage for a statesman to advocate the use of Treasury notes in Congress as- it formerly did to oppose the encroachments of the slave power. The money kings flourish and use their thongs with all th.e audacity that the slave lords, in olden time, used their slave-whips. That staunch, practical, common-sense man and true patriot, Thaddeus Stevens, was ridiculed, last winter, in and out of Congress, for proposing to use Treasury notes not bearing interest, in OUR MONEY WARS. 119 preference to those that did. Old Thad, as he was called, never was cowed by the slave-holding aristocrats. May he as successfully fight the bullionists. 1864. Ten-Day Loans. — The Act of Jan. 30, 1864, added 50 Million dollars to the Ten-Day Loans — making 150 millions. Spaulding makes this significant admission: "The certifi- cates were circulated to some extent in the clearing-houses, and among individuals ; thereby aiding the general inflation that began with the passage of the Legal-tender Act." Act ok March 2, 1864. A loan of $200,000,000, five or six per cent. 10-40S. Government Selling Gold. — The Act of March 17, 1864, gives the Secretary of the Treasury power to sell gold, and to pay interest upon bonds, one year in advance of when it became due : with or without rebate. Here is this precious joint resolution of Congress of March 17, 1864 — a fair specimen of the more infamous and bare- faced steals in which that body connived with the usurers. It read : "That the Secretary of the Treasury be authorized to anticipate the interest on the public debt, by any period not exceeding one year, from time to time, citJterwith or with- out rebate of interest itpon the coupons, as to him may seem ex- pedient ; and' he is hereby authorized to dispose of any gold in the Treasury of the United States not necessary for the payment of interest on the public debt." Thus did the rogftes in and out of Congress suck the life- blood of the people during the most terrible exigencies of the war. S. M. Brice of Mound City, Kansas, m his able " Financial Catechism," printed in 1882, speaks in the following spirited way of this sweet-scented transaction : — No scruples were entertained with regard to the means to be used, so that the robbery could be accomplished under cover of law. The laws under which the bonds were issued called for paying the usury in coin semi-annually. Coin was no.w at a premium of 2.85. The opportunity must not be lost. A law must be passed in order that this advantage could be realized to its fullest extent. Accordingly, on March 17, 1864, an act was passed authorizing the Secretary of the Treasury to pay the usury one year in advance, without I20 OUR MONEY WARS. rebate. Here was an opportunity for a nice financial trans- action : The money-dealer lias invested $35,100 in coin in ^100,000 legal-tender notes ; he steps into the United States Treasury and pays these notes for a bond of $100,000, bear- ing usury at the rate of six per cent, per annum. He now draws usury from the Government on nearly thi'ee times as many dollars as he has invested in gold. But still not satis- fied he says : " Mr. Secretary, I believe since the passage of the late Act of Congress, you are permitted to pay the usury on these bonds one year in advance, without rebate. Would it be convenient for you to pay me the first install- ment on this bond this morning ? " Certainly. And the accommodating Secretary counts him out $6,000 in gold for the first year's usury on his bond. He steps across the street and sells his gold to an importer for $2.85 in currency for a dollar in gold, giving him $17,100, with which he returns to the Treasury and invests in another six per cent, bond of that amount. He now has, on account of the vicious legislation of the Congress of the United States, six per cent, bonds to the amount of $117,100 for an outlay of $35,100 — more than three dollars for each one invested. He might have demanded, under the law, the usury on this bond also, for a year in advance. But extreme modesty com- pelled him to forbear encroachments on the time of the gentlemanly officials, in order to give opportunity for others of the bondholding fraternity to avail themselves of the special privilege created for them by law to rob the Treasury of the United States. * Hereby hangs a long tale. During the forty-fifth Congress Representative J. B. Weaver introduced into the House the following resolution : " Re- solved, That the Secretary of the Treasury be, and is hereby directed to report to this House whether he has at any time anticipated the payment of interest on the public debt : if so, how much has been paid in advance, and to whom." This resolution was referred to the Committee on Ways and Means, of which Fernando Wood was chairman. Mr. Wood sent the resolution to Secretary Sherman, with a re- quest to state when he would report. Mr. Sherman replied that " There was no public document that would give the infor- mation required.^' But he added, " The Department has been iu the habit for five years [he knew well it was 16 years] of OUR MONEY WARS. 12 1 paying the interest in advance without charging anything." When we recollect that the act permitting this outrage was passed March 17, 1864, when gold was at a premium, which made it a big object to obtain the usury in advance ; and this resolution of inquiry was sent to the Secretary in 1880, 16 years after, when gold commanded no premium, and he states that it has been the custom for the last five years to pay the interest on the bonds one j'ear in advance without charging anything — connected with the other statement, that there was no public document in his office which would show how much money had been so paid, and to whom paid, we are driven to the conclusion that it has been the practice since the. passage of the act ; and that the Secretaries oj the Treas- ury have conspired with the money-dealers to rob the Govern- ment through all this period, and keep no [public] record of the fact, by which the amount of the robbery could be ascer- tained. Judge Warwick Martin says : — The laws of 1862 and 1863 authorized the Secretary of the Treasury to purchase bonds for legal-tender notes, but did not authorize him to sell gold for legal-tender notes, and to purchase bonds with the pro- ceeds. The Act of March 17, 1864, authorized the sale of gold. Gold had accumulated, and was accumulating so fast in the Treasury that from one hundred to one hundred and fifty millions of dollars were constantly in the Treasury. This act authorized it to be sold for legal-tender notes. Mr. Fessenden, and even Mr. McCulloch, sold this gold without giving notice of the time when, and the place where the sales would take place. This had a salutary influence upon \\'all Street. The gold gamblers could not tell when and where the blow would fall. But, nevertheless, the sales of gold were not wisely made. These Secretaries of the Treasury should have urged, in all their communications to Congress, the absolute necessity of making the legal-tender notes re- ceivable for duties on imports ; which alone would at once have brought them to par with gold, and made them more desirable than gold. But they did not see proper to do this. In the absence of such a law, they should — with the large amount of gold in their possession — have forced legal-tender notes to par with coin, by selling, and continuing to sell, $5,000,000 per day. Instead of this, small sales only were made. The object seemed to be to make a profit upon the 122 OUR MONEY WARS. sale of gold ; instead of reducing the discount upon the lega.l-tender notes. There never was a time when the forcing of $10,000,000 or $20,000,000 of gold upon the market would not have broken down the Wall Street combination to keep it up. On " Black Friday," in 1869, the sale of $5,000,000 reduced gold from ,60 per cent, premium to 30 per cent. The sale of another $5,000,000 would have brought it to 20 per cent. To have continued these sales every day for a week would have brought legal tenders to par, without the sale of more than ^30,000,000 coin. The coin would have come back into the Treasury immediately, in payment of duties on imports, or for certificates of deposits. The busi- ness demand for gold was small : the speculative demand was large. In this way, the Secretary of the Treasury could and should have broken up the gold sales. But from the days of Chase and Fessenden, there was a combination between Wall Street and the Treasury, to increase, instead of reduc- ing, the premium on gold for legal-tender notes ; the object being to drive them from circulation, and fill their places with National bank notes. Interest-bearing Notes made Legal Tender. — The Act of June 3, 1864, Revised Statutes, section 3476, specially provides : " Treasury notes, bearing interest, may be paid to any creditor of the United States at their face value, exclud- ing interest; or to any creditor willing to receive them at par, including interest." Here is the famous section of that same act on which is based the true statement that the National banks borrow from the Government at one per cent.: " And in lieu of all existing taxes, every association shall pay to the Treasurer of the United States, in the months of January and July, a duty of one-half of one per centum each half year, 'from and after the first day of January, 1864, upon the average amount of its notes in circulation." Upon this subject, the late John G. Drew sent me the following letter when I was editing in Chicago : John G. Drew, Journalist. Elizabeth, N. J., Aug. 14, 1891. Friend L.: — Do you notice a statement current in the papers that John Sherman has recently said that he never knew that the Government ever loaned money at one per cent, interest (and called it tax). If he would kindly refer OUR MONEY WARS. 1 23 to his Revised Statutes of the United States, section 5157 et ultra, or section 39 ct iiJtra of the National Bank Laws, chap. 3, headed, "Obtaining and issuing circulating notes," he can refresh his memory muchly. He should not rise from that interesting and exhilarating study without especially noting and digesting section 5214 Revised Statutes, and section 90 National Bank Laws, where, with an insolence worthy of a Nero or a Caligula, it rules on the superincumbent filth in part as follows : [Mr. Drew then quotes the law as given above, and adds :] But, dearly beloved, don't publish it in the Sentinel of Gath, and keep it from the Express of Askelon ; or the distributors of hayseed may abandon their claim for two per cent, money, and adopt the time-honored plan, never forgotten by John Sherman, of lending money on good security for noth- ing, except the privilege of taxing the loan one per cent, per year " in lieu of all existing taxes." National Banks Fixed for Gambling. — The Act of June 13, 1864, repeals the Act of February 25, 1863, and provides more fully and extensively for the issue of the Na- tional bank circulation. One provision is that banks in cities, or money centers, shall always keep, as reserves, 25 per cent, of their circulation and deposits in lawful money, or legal-tender notes ; and that banks not in money centers should keep 15 per cent, of the circulation and deposits in lawful money. A neglect to comply with this clause in the law subjects banks to the forfeiture of their charters. These banks had fully secured their circulation by bonds of the United States to the extent of 10 per cent, over the amount issued upon them. The legal-tender notes were not, therefore, required to make the circulation secure. The object of this section of the law was to reduce the amount of legal-tender notes in circulation, and to fill their places with National bank notes ; and also to concentrate money in New York and other 'money centers, for speculative purposes. This act required these banks, before they could lift their bonds deposited in the Treasury as security for circulation, to return their notes to the Treasury. This was just and proper; but we will see, further on, how the law was changed in the interest of the banks and bondholders. The notes of these banks were made legal tender to the Government, and to the banks, for everything except duties on imports, and 124 OUR MONEY. WARS. interest on the public debt ; but tliey were not legal tender to the people, or receivable in redemption of legal-tender Treasury notes. The former were redeemable in the latter, but the latter were not redeemable in the former. Judge Warwick Martin says : — The most ruinous provision in the act provides for selecting banks in redemption cities, to redeem the notes of National banks ; and that one-half the reserve of said banks thus selected may be in these re- demption banks. This section in the law took the money of the bank from the place where the bank was located, and transferred it to New York and other places where it was not needed for business, and where it was used for stock and gold gambling, to the injury of the country. The notes of the banks needed no redemption by other banks. They were par everywhere. The notes of one bank were as good as those of another. No redemption of said notes took place. The whole provision was intended to place the funds of National banks in New York, so that the money market could be controlled by New York at any time, ^^'e all remember the disastrous results of said law in the fall of 1873, when the New York banks suspended currency pay- ments owing to their gambling operations. Gold Futures Stopped and Unstopped. — The Act of June 17, 1864, provided, under penalty, that neither gold nor sterling exchange should be sold for future delivery ; which was intended to put a stop to gold gambling. While it re- mained in force, this law had the desired- effect ; the gold sold and purchased was demanded by the laws of commerce. Had this law not been repealed, it would have proved of im- mense advantage to the United States. But it would have closed the gold board ; and that ^^'all Street could not permit. The brokers marshaled their forces to battle with Congress once more. They went to ^\'ashington, " terrible as an army with banners," and demanded the repeal of the above law. Congress at once complied with the demand ; the law was repealed on July 2. It lived just fifteen days. It is ever thus with Congress, " when they would do good evil is present with them." The tax imposed by this Act of July 2, 1864, was never collected. The result was that Wall Street, as usual, triumphed over Congress. Spaulding shows that only 73 millions of ten-forties had OUR MONEY WARS. 125 been sold by June 21, 1864 ; for the reason that the interest had been reduced from six to five per cent. Chase Frightened Out. — June 30, 1864, was an im- portant date. Secretary Chase, frightened at the rise of gold to 2.50, resigned ; and Fessenden, talcing his place, promptly put it up to 2.85. Spaulding gives this from Fessenden's report on taking hold — as representing the total currency issues outstanding at that date : U. S. notes, Greenbacks $431,178,670.84 Postal currency •. 22,894,877.25 Interest-bearing legal-tender Treasury notes.. 168,571,450.00 Certificates of indebtedness 160,720,000.00 National bank notes 25,825,695.00 State banks not less than 135,000,000.00 $944,190,693.09 Seven-thirty Treasury notes. $109,356,150.00 Temp, deposit certificates.. 72,330,191.44 , — — ■ 181,686,341.44 Total currency and used as currency $1,125,877,034.53 Six per Cent. Bond. — An Act of June 30, 1864, provides for the issue of $400,000,000 six per cent, bonds, redeem- able in five or pa)'able in 30 or 40 years. The Secretary is authorized to sell these bonds in Europe or America, "for coin or other lawful money ; " or certificates of indebtedness ; or any other obligations of the Government, excepting the bonded debts, whether bearing interest or not. The bonds are to be exempt from taxation of all kinds. It will be seen that for these bonds the legal-tender notes were to be re- ceived ; but this did not authorize their reception for any other bonds. This act also provides for the issue of $200,000.- 000 7-30 notes, in sums of not less than $10; redeemable in three years, and payable in "lawful money." Such of these notes as made the principal and interest payable at their ma.turity only were made legal tender, —the same as the legal-tender notes, — for their face value. To creditors of the Government they were to be paid at par, including in- terest. They were convertible into bonds, at the will of the holder, or the discretion of the Secretary of the Treasury. This act also provides for the issue of $150,000,000 temporary 126 OUK MONEY WARS. loan interest certificates. Out of the $450,000,000 legal-ten- der notes authorized, $50,000,000 were to be retained at all times in the Treasury, to redeem certificates when presented. B. S. Heath gives 15 million compound interest notes as outstanding July i, 1864. Secretary Fessenden, in his report in December, 1864, makes the following admissions that seem singular in view of the conspicuous part played by him in mutilating the Greenback, etc. He said : " The experience of the past few months cannot have failed to convince the most careless observer that, whatever may be the effect of a redundant circulation upon prices of coin, other causes have exercised a greater and more deleterious influence. In the course of a few days, the price of this article rose from $1.50 to $2.85 in paper for $1.00 in specie ; and subsequently fell, in as short a period, to $1.87 ; and then again rose as rapidly to $2.50 ; and all without any assignable cause, traceable to an increase or decrease in circulation of paper money, or an expansion or contraction of credit, or other similar influence on the market tending to occasion a fluctuation so violent. It is quite apparent that the solution of the problem may be found in the unpatriotic and criminal efforts of speculators — and probably of secret enemies — to raise the price of coin, regardless of the injury inflicted upon the country, — or desiring to inflict it." No man living, except John Sher- man of Ohio, was better able to explain how, and through whose instrumentality, these rascally speculators were enabled to prosecute their "unpatriotic and criminal efforts," than Mr. Fessenden himself. Under the circumstances, Mr. Fes- senden did not find the position of Secretary of the Treas- ury a very comfortable one , and at the beginning of ^Nlr. Lincoln's second term he surrendered it with feelings of great relief. In 1864 new cent and two-cent pieces were created, the cent containing only 48 grains of copper, tin and zinc. One dollar or one hundred of these contain only 4,800 grains, instead of 26,000, as under the law of 1792. A pound of this metal costs only 20 cents. It coins 160 one- cent pieces. The commercial value of the metal is only 20 OUR MONEY WARS. 127 cents. The legal value of the money is jf 1.60. The law here makes a clear gain of $1.40. It will be observed that two new metals, tin and zinc, not named in the Constitution, were thus introduced as money- metals. Playing Ink-Fish. — An impartial review of the financial history of these war years seems to lead to the conclusion that our leading politicians were trying to play ink-fish ; and so blacken the waters, that no ordinary honest mortal could, at any future time, see through all the ins and outs of their fifteen different kinds of currency (when the plain Green- back was all that was necessary) ; and detect the one fact running through it all — that the main object was to play into the hands of the usurers. 1865. Carey on McCulloch. — -Noble Henry C. Carey said, in 1875 : " At the close of the war, Mr. McCulloch was seated in the Treasury chair, there placed by Mr. Lincoln, in the full belief that he was a decided protectionist, and as decided an opponent of contraction. That he was so in May, a few weeks later, I know from personal intercourse with him. Nevertheless, but three months later — and with- out the slightest explanation of the cause of change — he presented himself, in correspondence with his agent then in England, in a totally different character. That change was to be followed in October by his Fort Wayne decree — as discreditable a paper, in my belief, as was ever issued from the treasury of any civilized country whatever. By it, all who were so unfortunate as to be in debt, were cautioned that they must sell off and pay their debts ; all who could command the use of money being simultaneously cautioned not to purchase ; .the prices of labor, materials, houses and lands being all too high, and it being the determination of the Treasury to bring them all down to " hard pan " ; thus restoring to us that admirable system which had existed before the war, when each successive British crisis brought ruin to half the households of the country ; and so effectually pre- vented the growth of public confidence that the prices paid as interest ranged between six and 200 per cent., 'whenever not so high as 500 per cent. Shortly thereafter, the Controller of the Currency made a report, by which it was 128 OUR MONEY WARS. clearly shown that the total amount of bank-notes, Green- backs and interest-bearing legal tenders, in actual use, as money, among our people, was but ^460,000,000 ; being but ^80,000,000 more than the notes of and under 20 dollars, now in use among the people of France ; and less by above $100,000,000 than the total notes in use among a people who, more than almost any other, had been accustomed to regard the precious metals as the only description of money on which they could place reliance. Add to the notes the metallic money in actual use in the country, and it will be found that the currency in actual use exceeds by fully fifty per cent, that which then here existed, whose extraordinary abundance was denounced by a gentleman who, a few months before, had accepted office as an anti-contractionist. * * * The Treasury was converted into a great manufactory of bonds for exportation ; and to the end that a foreign market might be created. Congress was repeatedly urged to put the country on a par with Spain, Turkey, Egypt, and other semi- civilized countries ; by providing that the interest should be made payable on the London Exchange ; these extraordinary and expensive operations being intended, as we were as- sured, as a means of reaching that early resumption of specie payments, with its attendant advantages to the already rich, from which Mr. Secretary McCuUoch had so utterly revolted, throughout the first few weeks of his administration. The Act of January 25, 1865, provides for the issue of non-interest-bearing Treasury notes, in lieu of any balance of the loan of June 30, 1864; provided that this issue shall not extend the amount to over ^400,000,000. February 4, 1865, gold was 2.00. Seven-Thirties. — An Act of March 3, 1865, provides for the issue of $600,000,000 bonds or Treasury notes, the bonds to bear six per cent, interest, and to run four years ; none of which were to be for leSs than $50. They are pa3rable at any time within forty years. If tliese bonds are paid in other lawful money, they were to bear 7.30 per coiit. per annum. Authority is given to sell the bonds in the United States and in Europe, for coin or for Treasury liotes, or legal-tender notes, or any obligations of the Government, bearing or not- bearing interest ; excepting bonds of the United States. This act was passed at the request of McCulloch, and was OUR MONEY WARS. 129 intended to cause all forms of legal-tender money issued by the United States to be funded into bonds. This act positively prohibits the issue of any more legal-tender notes. The plan was to retire and destroy all of said notes ; so that the National banks might have an open field for circulation. The war then was — as all saw — ^about to end. The monied men were buying legal-tender notes at» a heavy discount, intending to invest them in bonds, which they did. Another Act of March 3, 1865, provides that National banks shall be granted 90 per cent, circulation upon bonds up to $500,000, Dut less than 90 per cent, when the bonds exceed that sum. This appears to have been passed to prevent banks in large cities from taking up all the circula- tion. This law is, however, repealed by the Act of January 14, 1875. State Banks Taxed to Death. — Another Act of March 3, 1865, imposed a heavy tax upon all State-bank circulation, to take effect after July i, 1866. After the banks suspended in December, 1861, they greatly increased their circulation, and used their means to injure the legal-tender notes. All their strength was combined to compel the Government to abandon the legal tenders, and to use their suspended notes. If the bank-notes lived, the Government notes must die. This tax was imposed to put an end to State-bank circula- tion. It had the desired effect. The act was justifiable. The Government had the same right to suppress this hostile circulation that it had to put down any other public enemy. The Freedmen's Bank. — Another Act of March 3, 1865, estabhshed the Freedmen's Bank, authorizing loans to be made upon Government bonds only. After certain sharks in Washington obtained control of the bank, they induced Congress to change the charter, allowing investments made in bonds and mortgages, and loans to be made upon col- laterals. This ruined the bank. Had the institution been confined to its original charter, all v/ould have been right. The bank would have been a blessing to the colored race. But the poHtician ruined it and them. In April gold was 1.50. McCulloch's Treachery. — Henry C. Carey thus reports upon McCulloch's treachery : — 9 130 OUR MONEY WARS. In May, 1865, very shortly after his accession to the post of Secretary, I had a conversation with him, in the course of which he declared himself a disciple of Mr. Clay, and thorough believer in his protective doctrines. Regarding him as sincere in this expression of opinion, I said that, in view of the great changes now to- be met — millions of men, North and South, neturning from the field and needing to seek employment, at a time when the Government must not only cease to be a purchaser, but must, on the contrary, be- come a seller of commodities it had already purchased — it was most desirable that all our measures should tend in the direction of stimulating production and making demand for labor; and that, if I had my will, gold should be at 2.00 for the next seven years ; as the premium afforded a protection , that even false invoices would not enable the foreigner to avoid. Fully coinciding in the view thus suggested, the Secretary answered : " That is too much ; but I would gladly see it at 1.75." Three months later, he was instructing his represent- atives abroad, to give assurance that we should have resumed specie payments before the first 7-30S became due. Two months yet later, came the destructive Fort Wayne decree ; and from that hour did the Secretary persist in the absurd and injurious course of policy therein announced. But few months later, he presented himself as an opponent of these doctrines of Mr. Clay, of which he had been before the ■aTdvocate. ^^'hat is the value to be attached to his present opinions, may be judged from this exhibit, now for the first time, put on paper ; although fully authorized by him on the day succeeding the conversation above described. He is, as I believe, the only one of our finance ministers who has ever retired with the reputation of a large fortune, accumulated during his term of office. ^ B. S. Heath makes the amount of National bank notes, July I, 1865; to be 67 millions. McCulloch began to retire Greenbacks, August, 1865. Had 70 millions retired by July, 1868. Sept. I, 1865, 830 millions of 7-30 notes were outstanding. This was the highest figure. They were redeemable Aug. OUR MONEY WARS. 131 15, 1867 ; June 15, and July 15, 1868. $195,800 were out- standing June 3, 1875. Retiring Legal Tenders. — The Act of Sept. 12, 1865. The legal-tender notes did not come in to be invested in bonds as fast as the Secretary of the Treasury had hoped for, An additional law was enacted at the above time. The war was now ended. The soldiers and sailors had to be paid off. They did not want bonds ; they desired lawful money. The law of March 3, 1865, had prohibited any further issues of legal-tender notes. Eut legal tenders were the only money which the soldiers were willing to receive, notwithstanding the heavy discounts which the law had "made upon them. This law of Sept. 12, 1865, provided that the legal tenders might be received for bonds to the' extent of $10,000,000 in the next six months, and $4,000,000 per month ■ after that time. This was continued until an order came from Con- gress to stop the reduction. This is styled an act to retire the legal-tender notes. In October, 1865, McCulloch issued his Fort Wayne decree, announcing his determination to contract the currenc}'. The Total Debt. — \\ . A. Birkey gives the following as the total debt anicurrency of the country on Oct. 31, 1865, National bank notes not included : Total bonds (which he enumerates) $1,163,769,611.39 Currency. Compound interest notes, due in 1867, 1868 173,012, 141.00 7-30 Treasury notes, due in 1867, 1868 830,000,000.00 Temporary loans, ten-days' notice. . . .' 99,107,745.46 Certificates of indebtedness, due in 1866 55,905,000.00 Treasury notes, five per cent., 1865 32,536,901.00 U. S. Notes 428,160,569.00 Fractional currency 26,057,469.20 1,644,779.825-66 Total debt $2,808,549,437.05 132 OUR MONEY WARS. Two Billions of Currency. — As to the fact that there was near two billions of currency in 1865 and 1866, Judge Wm. D. Kelley spoke in Congress in February, 1879. Quoting McCul- loch's admission in his report of December, 1865, that " 30 millions of the compound interest notes are in circulation as currency, and many of the small denominations of the 7-30S are also circulating, and all of them tend in some measure to swell the inflation," the Judge says ; " The ^143,000,000 com- pound interest notes were outstanding, and were legal tender for their face value ; and if the $830,000,000 of 7-30 Treas- ury notes were not so, the people who accepted and used them as such were deluded by the phraseology of the law under which they were issued. If they were not legal tender the proviso which declared that they should not 'be legal tender in payment or redemption of any notes issued by any bank, banking association or banker calculated or intended to circulate as money' was worse than useless verbiage; inasmuch as it was calculated to deceive, as to the character of the security they were to receive, those to whom the Gov- ernment was, under the provisions of the act, to appeal for a loan of more than $800,000,000. If they were not intended to be a legal tender for all other purposes, why was it neces- sary to thus speeifically prohibit hanks from paying their ?iotes 7Liifh them, as they were required to do with the non-iiiterest- bearing legaltcnder notes, known as Greenbacks t " This from Logan comes in well here: "The circulating medium has been contracted $1,018,167,784. — John A. Logan in Congressional Record, page 139, Appendix for 1874." There is abundant evidence all through this book that we had near two billions of money in 1865. Here are some items not given elsewhere : Mr. Hotchkiss, of New York, July 25, 1866, in a debate in the House, said : " We have now in circulation about $i,ooo,- 000,000 of paper currency, exclusive of the $800,000,000 of 7-30S, which pass from hand to hand as a circulating medium to a great extent." Mr. Morrill, of Maine, stated in a speech in the House, March 16, 1866: "That the banks held immense sums of interest-bearing notes during the maturity of interest, nnd were disposed to flood the country with them after interest had been realized." Hon. W. Loughridge, of Iowa, April 9, 1874, in the OUR MONEY WARS. 133 House, said: "During tlie war the volume of currency was largely increased from time to time, until at its close the amount in circulation, including the 7-30S and all the differ- ent issues which served the use of currency, was about $1,700,000,000, and this amount had been up to the close of the war confined to the States not in rebellicn." J. J. Knox, late Controller of the Currency, said in the Bankers' convention, Oct. 12 and 13, 1887: "About four years after the war had commenced, in August, 1865, the public debt amounted to $2,845,907,426 ; and included in this huge mountain of indebtedness, there were 1,540,000,000 of Treasury notes either payable on demand or bearing inter- est, of which more than $1,500,000,000 was a legal tender. If temporary loans, payable in thirty days, and certificates of indebtedness, payable one year after date, should be included with Treasury notes, the wiiole would amount to consider- able more than three-fifths of the $2,846,000,000 of the debt of the country." — Proceedings of the Convention, pages 20-21, Senators Beck, Ferry and others, besides hundreds of Congressmen and business men, have stated that the interest- bearing notes were used as money, and pointed out the dis- tress which followed their being withdrawn from circulation. McCulloch's Mad Policv, — In- his report of Dec. 4, 1865, McCulloch said to Congress; "The issue of United States notes as lawful money was a measure of expediency, doubtless, and necessary in the great emergency in which it was adopted. But this emergency no longer exists ; and however satisfactory these notes may be as a circulating medium, and however desirable may be the saving of inter- est, these considerations will not satisfy a departure from that construction of the Constitution which is essential to the equal and harmonious working of our pecuHar institutions." Reformers sneeringly ask, " What peculiar institutions ? " Again he says : — " The rapidity with which the Government notes can be withdrawn will depend upon the ability of the secretaries to dispose of the securities. The Secretary, therefore, respect- fully but most earnestly recommends : First, That Congress declare that the compound interest notes shall cease to be a legal tender : Second, that the Secretary be authorized to sell bonds of the United States, bearing interest at a rate not exceeding six per cent., for the purpose of retiring not only 134 OUR MONEY WARS. compound interest notes, but the Unitecf' States notes. The first thing to be done is to establish a policy of contraction. Heath says : " This Congress, established by resolution on Dec. 18, 1865. How many of the eleven millions of producers, toiling in their shops and factories, delving in the subterra- nean storehouses of the earth, or bending their backs to the harvest sun, petitioned Mr. ]\IcCulloch to make these sug- gestions to Congress on its meeting ? How many of these millions asked that the thing for v/hich they were all toiling might be made more scarce and difficult to obtain ? How many of them prayed that, instead of receiving Greenbacks for their products, they might be made to pay a semi-annual gold bonus to have them destroyed ? How many of them volun- tarily consented to have the value of their property depre- ciated one-half, and the value of their products reduced ? How many of them consented to be turned into the streets, their families into the poorhouse, a hundred thousand bank- rupted — and the most fortunate among them taxed beyond their ability to pay — simply to conform to a system of con- traction, for the benefit of whom f " For some facts about McCuUoch and Robeson's " pe- culiar institution," in London, in 1865, see item about Mc- CuUoch's London Bank in " 1862." Judge Kei.ley Pleads Ignorance. — As to the stupid vote for Resumption in Congress, Dec. 18, 1865, Judge Wm, D. Kelley said, in his speech on " Financial Mismanagement," Feb. 14, 1879 :— I regret to say that my vote on that resolution was, with the overwhelming majority, in its favor ; there having been but six members of the House who appear to have foreseen the terrible results such a measure must produce, and voted against it. The resolution was adopted Dec. 18, 1865, and read as follows : '■^Resolved, that this House cordially concurs in the views of the Secretary of the Treasury, in relation to the necessity of a contraction of the currency ; with a view to as early a resumption of specie payments as the business interests of the country will permit ; and we hereby pledge co-operative action to this end as speedily as practicable." My vote attracted the attention of many of the most en- lightened business men of Philadelphia ; from whom I received earnest protests against tlie initiation of a policy so destructive as that of attempting resumption by contracting OUR MONEY WARS. I35 a volume of currency that was legitimately and profitably employed ; and the retirement of which, by its conversion into interest-bearing bonds, would inevitably impoverish the American people, and transfer our debt from them to the syndicates and bankers of Europe. The Christmas vacation was at hand, and on my return to Philadelphia my venerable friends Henry C. Carey and the late Stephen Colwell, whose work entitled " Ways and Means of Payment " is, in my opinion, the most valuable contribution ever made by one man to the financial literature of the world, each honored me with protracted interviews ; during which they approved the judgment of the business men who had censured my vote ; and so instructed me in the laws of trade and finance, as to enable me to act with an enlightened judgment, on such finan- cial questions as might thereafter come before Congress. 136 OUR MONEY WARSi CHAPTER XIII. 1866 to 1873. CONTRACTION. 1866. The Contraction Act was passed April 12, 1866. Previ- ous to the passage of this act the Secretary, under the law of 1865, had been permitted to reduce the legal-tender notes $10,000,000. This Act of 1866 gave him authority to receive for bonds $4,000,000 legal-tender notes per month. Under this law he went on reducing the legal tenders until February, 1868. He would have continued the investment of the whole of them in six per cent, bonds had not Congress, owing to the solicitations of the people, compelled him to stop, of which he complained. These acts are disgrace- ful to the Secretary of the Treasury, having been enacted at his request, and they are by no means flattering to Con- gress. Under this act $1,300,000,000 of actual currency was turned into bonds. Judge Warwick Martin says of The Financial Difficul- ties OF England in 1866 : — We have shown that the finan- cial difficulties of the United States, in 1866 and 1867, were not produced by speculation, but by a ruinous contraction of the circulating medium. In England, in 1866, there were much greater financial embarrassments than in the United States in 1866 or 1867, all of which were caused by immense speculations in railroad and other stocks. The consequences of these speculations were, in England, most disastrous. Twenty-seven banks and bankers failed in London in one day. Hundreds of old, hitherto substantial business houses failed. Among these were Overend, Gurney&: Co., and Sir Morton Peto, of world-wide fame. The monetary condition of England was such that the Bank was compelled to raise the rate of interest to the point where the law of 1844 allowed the Bank to suspend coin payments. What the Bank then ,OUIi MONEY WARS. 137 did was equivalent to the suspension of specie payments. All these results were caused by wild speculations. The money to carry on said speculations was not suspended bank paper, or the irredeemable issues of any nation, or irredeem- able paper money of any kind. It was the notes and credits of the great Bank of England, and of the joint-stock banks of the kingdom ; all, at the time they made the advances, professing to pay coin for their liabilities. H. H. Bryant, after showing how England organized ruin here by " calling " our gold in 1857, says : — Now, in 1866, the Bank of England was in trouble again, and failed, as she was obliged to do in 1857. But we were not on a specie basis in 1866 ; and she could have no more effect on our monetary system than a drop of water would have when it falls into the ocean — nor so much, for it could have none whatever. Nor could the failure of every bank and banker in all Europe have caused a single ripple on the surface of our monetary s)'s- tem. Then the industries of the country could not be knocked down, as with a bludgeon, and plundered, at ease, by any one who had \}!ie. power or the need to demand a little gold of us. "H. C. Carey says : — The extreme importance of the view here presented, to wit, the necessity for avoiding " entangling alliances " in reference to a matter so important as the monetary machinery of exchange, was made clearly obvious when, in 1866, like a clap of thunder in the clearest sky, the great crisis of that year, greater than any by which it had been preceded, brought ruin to hundreds of what had been considered the greatest British houses, and made de- mand on all the world for aid, if the Bank of England itself were to be enabled to avoid suspension. The crash was ter- rific, yet it never affected our domestic operations for even a single hour. Our monetary independence had been estab- lished. Our machinery of exchange being a non-exportable one, we had no use for gold ; and if it were needed abroad, we could say, " Let it go ! " Accordingly, no less than $30,- 000,000 were at once dispatched; the Bank was saved, and injury was thus avoided, to an extent that would scarcely be exaggerated, were it counted by hundreds of millions of pounds. And thus did Britain benefit by the fact that the currencies of the two countries were different. Had we been using gold, where should we then have found ourselves ? 138 OUR MONEY WARS. In the midst of a crisis greater than the country had ever known. The Act of July 26, 1866, provided that bonds issued to the Pacific Railroad, to the amount of $64,000,000, might be made in sums greater than $1,000, if so required. These bonds are all payable in currency. Cash Payments.— Judge W. I). Kelley thus describes the blessings of "Cash Payments '' in 1865 and i865 : — We had, in round numbers, about $2,000,000,000 of circu- lating medium and reserve. The American people then held the greater part of the debt of the country. One-fourth of our national debt was held by our National banks ; one-half of the discounts and loans made by the banks were to the Government, — the evidences of whose indebtedness they were glad to hold. Business men did not want discounts. All could get money for whatever they had to sell. The old-fashioned credit system of 18 months, or 12 months, or six months, or even three months, had disappeared. Cash payments were the order of the day; and from ten to thirty days was the longest credit asked in ordinary transactions. 1867. Three per Cent. Certificates. — The Act of March 2, 1867, provides for the issue of $50,000,000 three per cent, interest certificates to pay compound-interest notes. These certificates were to be held by National banks as reserves, instead of legal-tender notes, which were then so used. This relieved the money pressure to that extent. Why were not $50,000,000 new legal-tender notes issued in place of $50,000,000 three per cent, certificates ? This could have been done almost without cost, and it would have saved $1,- 500,000 a year. Why were not the $44,000,000, redeemed and lying idle in the Treasury, paid out ? Anything rather than save interest to the people. These $44,000,000 re- mained in the Treasury undisturbed, until the New York banks, in 1873, demanded them to save themselves from failure ; when $26,000,000 were paid out. The people could not get them. The banks could, and did. The people amount to little with the Republican party. The banks are everything. " AcDiriON, Division and Silence." — March 20, 1867, was OUR MONEY II'AA'S. 139 the date of the loiigf famous " Addition, Division and Si- lence " letter of \\'. H. Komble ; to which the AItc' Yo//: Sun was still thus lel'oninj;- in 1880 : — Does the State of IV'nnsylvania and the city of Philadel- phia still keep public funds on deposit in the People's Bank of Philadelpiiia ? It may not be generally known in Penn- sylvania, but the president and principal owner of that in- stitution is now a convict and a fugitive from justice, dodg- ing from State to State. He is the same man, who, while himself Slate Treasurer, wrote the following statement of his principles : Treasury Dkpartment of Pennsylvania, Harrishurg, March 20, 1867. Mv Dkar Titian, — Allow nie to introduce to you my particular friend, Mr. George O. pA-ans. He has a claim of some magnitude that he wishes you to help him in. Put him through as you would me. /A- iinJcrstaiids addition, di- vision and siii!h\: Yours, ^\'. H. Kemble. To Titian J. ColTe)-, Esq., Washington, D. C. It would be interesting to know how many millions of pub- lic money this man has had in his hands, by virtue of deposits from State and city treasurers, say during the last five years, and how many millions his bank still holds. X'anderiult W'a rKRS New \'ork Central. — In 1867 and 1868 Cornelius ^'anderbilt watered the stock of the New York Central and Hudson River Railroad 47 million dollars. Upon this eight per cent, dividends were regularly paid. These dividends upon that water, compounded annually, for thir- teen years [i88o], amounted to over 75 million dollars. The most of our " great " men, in other industries, have done the same — according to opportunit}-. 1868. Shkr.man's Entering \A'En(iE. — In J-inuary, 1S6S, John Sherman, being then chairman of the Committee on Finance in the Senate, intr()difced a bill to change the gold coins of tlie United States, so as to make them correspond vvitii the French fi\'c-rranc piece ; and to make the silver half-dollar correspond, in weight, to two and a half silver I40 OUR MONEY WARS. francs ; and dropping the dollar mtir'ely. This was the cunningly-applied entering wedge, that was to ultimately split " the dollar of the Fathers " off from our currency. A Short Stop. — The Act of February 3, 1868, ordered the reduction and destruction of the legal-tender notes to be stopped. They had been reduced from $450,000,000 to $356,000,000 — reduction amounting to $94,000,000 — and six per cent, bonds given therefor. The politicians did not order the cancellation of these notes to cease because they loved the notes, but because the people compelled them so to do. Even Mr. Sherman made a great speech in favor of this measure ; not from the love of legal-tender notes, but because he feared the people. Why did not Congress, at this time, add a few hundred millions to the legal-tender notes, instead of increasing the National bank circulation at large cost to the people ? The Act of February 10, 1868, authorizes the National bank shares to be taxed under State authority as much as those of other banks were, but not more. Check to Rothschilds. — It is alleged that the Roths- childs were in possession of several hundred millions of 5-20 bonds, at this time, purchased at about 60 cents on the dollar, or less ; and were particularly interested, therefore, in our politics. That their agent, August Belmont, who secured the position of chairman of the Democratic National Committee, was instructed by Baron James Rothschild, as early as March 13, 1868, that unless the Democratic Party went in for paying the 5-20 bonds in gold, it must be defeated. The first step was to have the National Convention held in New York City. July 4, 1868, the Democratic Convention met in New York, according to programme. Belmont and his satellites were unable to control the convention — at least in the matter of the platform — and it declared that all obligations against the Government not expressly payable in coin should be paid in lawful money of the United States. [See Oct. 15.] " The Great Commoner," Thaddeus Stevens, was still around, and able to lift his voice. In his speech of July 17, 1868, he said : "If I knew that any party in this country would go for paying in coin that which is payable in [lawful] money, thus enhancing it one-half, — if I knew there was OUR MONEY WARS. 141 such a party platform, and such a determination, this day, on the part of any political party, I would vote for the other side, Frank Blair and all ; I would vote for no such specula- tion in favor of the large bondholders, the millionaires, who took advantage of our folly in granting them coin payment of interest." A " Howling Success." — As a specimen of how the National banks were " getting there " all this time, take the following from the speech of S. S. Marshall of Illinois, in Congress, July 21, 1868: — I will report what a gentleman on this floor states as having occurred in an Eastern State within his own observation : " An association of gentlemen raised $300,000 in currency. They went to the office of the Register of the Treasury, and exchanged their currency for $300,000 in six per cent, gold-bearing bonds. They then went to the office of the Comptroller of the Currency, in the same building, organized a National bank, deposited their $300,000 in bonds, and re- ceived for their bank $270,000 of National currency. They had let the Government have $30,000 in currency more than they received for banking purposes ; and had on deposit $300,000 on which they received from the Government $18,000 a year in gold (exempt from taxation). That was pretty good financiering for these bankers to receive $18,000 in gold on the $30,000 in currency which they had thus loaned to the Government. " But this was not the whole story, They had their bank made a public depository. They soon discovered that there was scarcely ever less than $1,000,000 of Government money deposited within their vaults. They did not like to see this vast sum lie idle. They therefore took a million of this Government money and bought a million of 5-20 bonds with it. In other words, they loaned a million of the Govern- ment's own money to the Government, and deposited the bonds received in the vaults of their bank, on which they received from the same Government $60,000 in gold annually, as interest. " Thus, for the $30,000 in currency which they originally loaned the Government, they were receiving annually in gold (and exempt from taxation at that) $78,000. And all this was under the regular operation of your banking laws." The Act of July 25, 1868, provides for the issue of 142 OUR MONEY WARS. $25,000,000 more three per cent, interest certificates, of the same character and for the same purpose as the $50,000,000 provided for in the Act of March 2, 1867. They also were to be held by banks as reserves, for which legal-tender notes were then held ; so that the legal-tender notes might circu- late. Why not issue new legal-tender notes in place of the certificates and save the interest? But this was not the policy of Mr. Sherman and of Wall Street. Rothschilds Win, Seymour Beaten. — August Belmont owned a large interest in the N. Y. Wo7-ld, the leading Democratic paper of the country, which on Oct. 15, 1868, came out in a double-leaded editorial denouncing Seymour as unavailable, and unfit for President of the United States ; and advised his withdrawal. This so demoralized the Democracy that Grant had an easy walk-over, on the course. The platform on which Seymour ran called for quick pay- ment of the debt ; and in paper when coin was not stipulated in the bond ; taxation of Government bonds ; one currency for the people, the bondholder, office-holder, etc. Of course, our Boss Rothschild would not stand any such nonsense as that ; and so Belmont was ordered to order Manton Marble to play Benedict Arnold with his always-for- sale JVorld ]ns,t before election — just on the eve of a great battle; and Seymour was shelved. It is an interesting fact that Marble, who, not long before, had been a reporter on the Evening Post (and who had run the World, at a loss, for various masters), now suddenly acquired a fine brown-stone mansion on Fifth Avenue, and all that that implies. Re- siding at present in Paris, he occasionally instructs the American public, by Orphic oracles, concerning " the money question : " to which nobody who at all understands it, pays any attention. Before this time, Sherman, Morton and other leading Republican Senators had opposed coin payment of the bonds. They were bought and silenced by Grant's election. Then, as we shall see, came " The Strengthening Act." Save the mark ! The great economist Wolowski of Paris made this truth- ful prophecy in t868, when the subject -of demonetization of silver was discussed. He said that if that were done : The decline in prices will compel nations internationally in- debted to depart, more and more, from the principles of free trade towards a poUcy of protection. OUR MONEY WARS. 143 The nations of the world will be divided into two groups — the one trading in gold, the other in silver — and this con- dition will render commerce precarious and unsafe. Throughout the world a decline in prices will follow, in- jurious alike to owners of real property and the laboring classes, and advantageous only — and unjustly so — to the holders of State bonds and similar securities. One of the principal difficulties in this period of general depression will be that the people will look for its causes in all possible directions. The advocates of the gold standard will offer all possible groundless and fantastic excuses or reasons of a secondary nature only, and the real cause, the demonetization of silver, will be overlooked. There's Millions in It. — The speculators of the gold exchange for years kept gold up that they might buy Green- backs cheap ; to invest in bonds at par ; and below is the result, showing the year, the amount of Greenbacks exchanged for bonds, and the amount in gold, for which the Greenbacks were purchased from 1862 to 1868 : Year. Bonds. Cost in gold. 1862 % 60,982,450 % 44,030,649 1863 160,987,550 101,890,850 1864 381,292,250 189,697,636 1865 279,646,150 208,214,090 1866 124,914,400 88,591,773 1867 421,469-55° 303,215,303 1868 425,443,800 312,826,323 $1,854,736,150 $1,248,466,624 Here is a net profit of 606,269,526 Add interest to 1880 1,430,000,000 $2,036,269,526 The above figures are taken from the public record, and may be relied upon. The bondholders have received back more than twice the value they loaned, and still [1880] hold the bonds to draw more every year, until they mature ; when they expect to re- ceive their face in gold, or keep the blister drawing until it is paid. 144 OUR MONEY WARS. 1869. Checks on Banks. — The Act of February 19, 1869, pro- vides that National banks shall .not loan money on their own notes ; as it would tend to create a scarcity in the money market by locking money up. Quite a patriotic effort on the part of our rulers ! March 3, 1869, Congress passed an act against over- certification by banks. The banks were equal to the oc- casion, as usual ; as will be seen. The Credit Strengthening Act. — President Grant, in his Inaugural of March 4, 1869, notified the public that he would regard all who did not favor the payment of the 5-20 bonds in gold as repudiators, who need not expect any favors from his administration. March 11, 1869, when the Credit Strengthening Act was coming up. Governor O. P. Morton gave this last gasp against the gold bondage : " I am anxious to have the bonds paid in gold or its equivalent, and that will be the result when we return to specie payments, as I hope we soon shall. But when I am asked to say that it is the original law of the contract creating some of the bonds, I cannot do it, without changing my convictions as to the construc- tion of the statutes, which I have entertained from the first." The Act of March 18, 1869, called "The Credit Strengthen- ing Act," demonetized the legal-tender notes, and provided — contrary to the laws and the facts — that both legal-tender notes and 5-20 bonds were payable in coin, and should be so paid. By this act, the people lost and the capitalists gained $500,000,000. Large books have been written on the 5-20S, which were so largely affected by this evil legislation. John G. Drew wrote of their " Origin and History." He opens thus : " On the 12th of March, Mr. Schenck, of Ohio [better known afterward as Poker Schenck. — S. L.], introduced a bill into the House which, after the customary game of battle- dore and shuttlecock with the Senate, was passed. The same bill had before passed Congress, and been sent to the President (Johnson) ; but he — whether advised that Congress was exceeding its province in invading the functions of the Supreme Court by construing law, or whether he considered it as a sort of town-meeting resolution, we don't know — took OUR MONEY WARS. '45 no notice of it ; and thus the previous action lapsed by his default." Here is the Act of i86g, as approved by Grant : — An A t to Strengthen the Public Credit of the United States : Be it enacted, etc. : That, in order to remove any doubt as to the purpose of the Government to discharge all its obliga- tions to the public creditors, and to settle conflicting ques- tions and interpretations of the law, by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin, or its equivalent, of all the obligations of the United States not bearing interest known as United States notes, and of all the interest-bearing obligations, except in cases where the law authorizing the issue of any such obligations has ex- pressly provided that the same may be paid in lawful money, or in other currency than gold and silver ; but none of the said interest-bearing obligations not already due shall be re- deemed or paid before maturity, unless at such times as United States notes shall be convertible into coin at the op- tion of the holder, or unless at such time bonds of the United States, bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin. And the United States also solemnly pledges its faith to make provision for the redemption of the United States notes in coin. U. S. Grant. Approved March i8, 1869. It is proof positive that Europe did not consider the 5-20S coin bonds, that on Nov. 30, 1867, they were sold in Lon- don at 7o|- cents; while New Brunswick and Cape of Good Hope six per cents sold at 105 ; Russian five per cents ^t 85, and Brazilian five per cents at 75. B. S. Heath said of this act : — In 1869, when the Credit Strengthening Act was passed, changing the payment of the bonds from Greenbacks to coin, there was outstanding $1,500,000,000 of 5-20 bonds; all to become due and pay- able within the next twelve years. At that time, the coin resources of the Government were no more than sufficient to enable it to meet its current interest obligations. Never- theless, Congress obligated it to pay $1,500,000,000 of gold and silver. This was an apparent impossibility. It was 10 146 OUR MONEY WARS. intended to be such. The Act was for the express purpose of immortalizing the pubUc debt ; that it might never be paid. But when Nevada opened her rich vaults of silver, — and made it possible to pay the debt in accordance with the new terms imposed, — that metal was demonetized, and pay- ment limited to gold. It may seem strange to some that the bondholders should desire such legislation as would absolutely defeat payment to them. But they regarded the bonds as the best-paying investment into which they could put their mone)'. To say that our bands were issued and sold to raise money to carry on the war is absurd and false. It was a year and a half after they were authorized before they were put upon the market ; and. when they were offered it was not because the Government needed the money. Black Friday. — Warwick Martin says : — The run- ning up of gold from 25 to (^2\ on Black Friday, in Sept., 1869, and the crisis of 1873, were immediately caused by the banking law allowing banks at money centers to draw interest on the deposits of country banks. The money is loaned on call to speculators, who cannot respond when a scare comes. Secretary Richardson tried to have a law passed preventing this. But Wall Street prevailed. Up to 1869, the sales of gold had been made by the Secre- taries of the Treasury secretly ; but, in 1869, when General Grant became President and Mr. Boutwell Secretary of the Treasury, Congress were induced to authorize notice to be given of the time when gold would be sold, and bonds would be purchased. This was done by Mr. Boutwell, Mr. Richardson, Mr. Bristow, and Mr. Morrill, Secretaries of the Treasury. Nothing could have promoted the interest of Wall Street better than this law and the practice under it. As soon as notice was given each month, the gold brokers commenced reducing the premium upon gold until the day when the sales were to take place. On that day gold always ruled low. The Secretary received the lowest price for this gold sold. On the day following his sales the premium on gold, instead of going down, owning to said sales, always went up. The brokers sold what they had purchased from the Secretary of the Treasury, making a good profit thereon. In this way and by these means the Secretary enabled Wall Street brokers to make fortunes. OUR MONEY WARS. I4; One thing more and we close. In Sept., 1869, when no unusual demand for gold existed, it in some way became known that the Secretary of the Treasury did not intend to sell gold that month. The brokers of Wall Street thought it a proper time to get up a corner on gold, as though some great demand therefor existed. From day to day and week to week the, rate went up from 25 per cent, until it reached 60 per cent, premium. The sales by the Treasury of even one or two millions would have prevented the advance of the premium ; but no sales were made until the premium went up to 60; then $5,000,000 were sold, and in one hour the premium went down to 30. Had $10,000,000, instead of $5,000,000 been sold, the premium would have gone much lower. The notes could easily have been made par. \^'e do not accuse Mr. Boutwell of any combination with Wall Street to produce this state of things, but there is no doubt that some one very high in position was in that com- bination, expecting to participate in the profits. This com- bination prevented sales of gold from taking place on a cer- tain day. The matter should have been fully investigated. 1870. The Act of July 2, 1870, increases the circulation of National banks to $354,000,000 ; which was to be divided among the States, according to population. The Act of 1864 had limited them to $300,000,000. The Law of 1870, Providing that National Banks MIGHT Surrender their Circulation and Lift and Sell THEIR Bonds. — The previous legislation relating to bonds and National banks had raised the price of bonds, which cost not more than $40 coin to the $100, to $120 and $125. It was a most favorable time to sell 5-20 bonds, before many of those issued under the funding laws of 1870 and 187 1 could be sold and the 5-20S called in. Consequently Sher- man, who had charge of the National banks in the Senate, placed a section in the Act of 1870, which provided that by placing the despised legal-tender notes in the Treasury to the amount of the circulation of the banks, they could lift and sell their bonds, and the Government would redeem the bank notes. Two objects were accomplished by this pro- vision in this act. The National banks, thus surrendering circulation, sold their 5-20 bonds, — which they would soon 148 OUR MONEY WARS. have been compelled to surrender under the law of 1870, — at a premium of 20 or 25 per cent., and were prepared, after making a large sum, to supply their places with five per cent, bonds at par. For this act the National banks should feel grateful, and no doubt they do. Another object of this pro- vision of the act was, to lock up the legal-tender notes in the Treasury, and to keep the National-bank notes out ; and thus reduce the circulation of the country, and especially of the legal tenders. Another legal device to contract the currency — and especially the legal-tender notes — was to provide that when National banks failed, and their bonds were sold by the Government, the money (not in coin for which the bonds were sold, but in legal-tender notes) should be deposited in the Treasury, to redeem the notes of the failed banks. This reduced the quantity of legal-tender notes out in the business of the country, but kept the Na- tional-bank notes out among the people, until the Govern- ment saw proper .to pay out the legal tenders deposited for their redemption. It will be seen that every move made tended to the carrying out of the original intention of Mr. Sherman, — as stated in his speech of February, 1863, — to retire the legal-tender notes, and to substitute National-bank notes in their place. In 1870 and 187 1, the six per cents w€re worth 20 per cent, premium in Greenbacks ; which were 11 per cent, below coin. Under the above act, the banks sold about $300,000,000 of 5-20 bonds, — they having at the time $400,000,000; includ- ing some at five per cent, interest. 20 per cent, on $300,000,- 000 is ^60,000,000 — a neat profit. The Great Refunding Act. — The Act of July 14, 1870, authorized the issue and sale of $1,500,000,000 United States bonds, to refund the 5-20S : 200 million at five per cent. ; 300 million at four and a half per cent., and 1,000 million at four per cent., interest and principal in " coin." This loan was intended to be raised in Europe, — -especially among the English, who had been so hostile to us during the war ; and then bought Confederate bonds at a premium, while refusing ours. We did not need to borrow — the Government having an annual income of 300 million, \^'e could have borrowed any amount at home, at five per cent. The country was tolerably prosperous. The 5-20S were not due. Large quantities of them were in 503 and loos ; which were dig- OUR MONEY WARS. 149 tributed among the people of small means ; and were to them the same as money; — bearing interest when they did not need money, and always salable at par, or above par for legal tenders. It was a great hardship for the people to surren- der these bonds for the benefit of native and foreign capi- talists. \Ye got no foreign coin for them : England took care to prevent that. The Supreme Court and the Legal Tender. — In 1870 the Supreme Court decided — by a vote of five to three — that Congress had no constitutional power to make its notes legal tender in the payment of pre-existing debts. A change in the composition of the court resulted, in 1871, in a reversal of this decision by a majority of one. In i88"4, unenlightened public opinion was only represented, as will be seen, in this court by Judge Field of California. " God-made '' Money. — For the purpose of setting some thoughtless people right on the question of intrinsic value in money, we quote from the famous case of Knox vs. Lee, in the United States Supreme Court in 187 1. After deciding that Congress had full constitutional right to authorize the issue of legal tender money, the court said : — Here we might stop ; but we will notice briefly an argu- ment presented in support of the position that the unit of money value must possess intrinsic value. The argument is derived from assimilating the constitutional provision re- specting a standard of weights and measures to that confer- ring the power to coin money and regulate its value. It is said there can be no uniform standard of weights without weight, or of measure without length or space, and we are asked how anything can be made a standard of value which has itself no value. It is hardly correct to speak of a stand- ard of value. The Constitution does not speak of it. It contemplates a standard for that which has gravity or exten- sion, but value is an ideal thing. The coinage acts fix its unit as a dollar, but the gold or silver thing we call a dollar is in no sense a standard of a dollar. It is a repre- sentative of it. There might never have been a piece of money of the denomination of a dollar. There never was a pound sterling coined until 1815, if we except a few coins struck in the reign of Henry VII., almost immediately de- based, yet it has been the unit of British currency for many generations. 150 OUR MONEY WARS. The court further said : — The States can no longer declare what shall be money or regulate its value. Whatever power there is over the cur- rency is vested in Congress. If the power to declare what is money is not in Congress, it is annihilated. * * * The Constitution does not ordain what metals shall be coined, or prescribe that the legal value of the metals, when coined, shall correspond at all with their intrinsic value on the market. Nor does it even affirm that Congress may declare anything to be a legal tender for the payment of debts. Con- fessedly the power to regulate the value of money coined, aud of foreign coins, is not exhausted by the first regulation. More than once in our history has the regulation been changed without any denial of the power of Congress to change it, and it seems to have been left to Congress to de- termine alike what shall be coined, its purity, and how far its statutory value as money, shall correspond, from time to time, with the market value of the same metal as bull- ion. * * * No one ever doubted that a debt of $1,000, contracted be- fore 1834, could be paid by 100 eagles coined after that year, though they contained no more gold than 94 eagles such as were coined when the contract was made, and this, not be- cause of the intrinsic value of the coin, but because of its legal value. The eagles coined after 1834 were not money until they were authorized by law, and had they been coined before without a law fixing their legal value, they could have no more paid a debt than uncoined bullion or cotton or wheat. [In view of the fact that a full bench of the Supreme Court in 1884 reaffirmed this decision, one would think that intrin- sic-value people would be afraid to go before the public with such foolish statements as "God made money."] Repeal of the Income Tax (Statutes 16, p. 256) oc- curred in 1870. So long as this tax existed, it compensated, to some extent, for the failure to tax bonds. The bond- holders were taxed upon the income derived from the interest on their bonds. This was the most just and equitable tax ever imposed : but as it came from the rich and not from the poor, Congress, ever careful of such, kindly repealed the law applying to incomes, legacies and successions in 1870 — to take effect in 1872. This tax was upon railroads, banks, OUR MONEY WARS. 151 bondholders, capitalists and corporations. But this was re- pealed, and those upon the industries left standing. More Wealth in Ten Years than in 250 Previous. — The wealth of this country had greatly increased by 1870 ; in spite of all drawbacks. The Rural IVoi-hl said, soon after that date, quoting the census : — f n round numbers, the en- tire net wealth of the nation — produced by all' the labor ex- pended from the day the Pilgrims landed upon Plymouth Rock to the year i860 — was 15 billions. The combined wealth in 1870 was 30 billions. More wealth was created from i860 to 1870, during the Greenback reign, than during the en- tire history of the country before that ; when we were hobby- ing along upon a gold basis theory. The estimates in i860 include the millions in human chattels which were extin- guished before 1870 ,- and during the decade from i860 to 1870 we had a destructive war, in which hundreds of thous- ands of men were engaged in destroying wealth instead of producing it. 1871. The Act of January 20, 1871, made interest on the five per cents, payable quarterly [See Jul}', 1870] and added ^300,000,000 to them. The Three-sixty-five Bonds. — November 9, 1871, Hor- ace Greeley gave, in the New York Tribune, an exposition of the famous 3-65 bond plan, which is considered a very good statement. As the plan is now obsolete, it need not be re- hearsed. If the grand old man were now alive, he would be with the vanguard of reform — trying to cut down " interest, rent, and speculative profit,'" to the lowest possible point. Most people think that Greeley's nomination to the Presi- dency in 1872'was a mistake. But here is what Bishop J. \\'. Plood said of it in 1884: "The nomination of Greeley took the poison out of Southern sentiment ; and a fearless, up- right man can now win the respect of the people and work his way without difficulty." Carpet-bag Debts. — The following from the New York World of 1879, gives a dark picture of carpet-Lag debts in the South, in 187 1 : — Now that we have heard so much about Southern State debts, suppose we cite a few figures which were in circulation seven or eight years ago, and then pro- voked not a little comment. They showed the debt and con- tingent liabilities of the States in 1861 before, and again in 152 067? MONEY WARS. 1871 after they had experienced the blessings of civil war, reconstruction and- carpet-bag government. Inasmuch as these States were compelled to repudiate such indebtedness as they had incurred for the purposes of war, the increase was exclusively due to the Republican carpet-baggers, who were not satisfied with stealing all that had been left to the people after four years of war, but undertook to approp- riate in advance the earnings of the South for the next gener- ation. Debts and Liabilities. State Old. Alabama $7,945,000 Arkansas 2,084,179 Florida 370,617 Georgia 2,670,750 Louisiana 11,000,000 Mississippi None North Carolina. . 12,689,245 South Carolina. . 4,407,958 Texas . . . ^ 2,000,000 Virginia 33,248,141 New. $52,761,917 19.398,0^0 15.797.587 42,560,500 40.021,734 1. 697. 431 34,387,464 22,480,516 14,930,000 47,090,866 Increase. $44,816,917 I7>3i3,82i 15,426,970 39,889,750 29,021,734 1,697,431 22,198,219 18,072,556 12,930,000 13,842,725 $76,415,890 $291,626,015 $215,210,125 It seems to us but yesterday that Mr. Schurz, who was then a Reformer, was grieving ' over the spectacle of these down-trodden and scientifically plundered States ; and that even the Tribune had to shake its head at Spencer. And now ! French Paper Money.— In the " Cyclopedia of Money and Finance " I have partly shown that France's great vic- tory over Germany in the payment of three-quarters of the billion dollar indemnity by German bills of exchange, was principally due to the fact that the French rulers, right after the war, flooded the country with paper money, and thus pushed all the industries, and made French goods cheaper than German. The writer of the following, Ivan C. Michels, gets a glimpse of this in the italic part. His figures are an interesting corroboration of the great claim we Greenbackers have always made for French financiering : — The indemnity from France to Germany after the war of OUR MONEY WARS. 153 1870-71, including interest at five per cent, per annum, amounted to $1,060,209,015. After crediting France witli the value of certain .railroads in Alsace and Lorraine, the amount of indemnity due Germany was $998,172,069, or 4,990,860,- 349 francs, which was paid by the French Government through the Bank of France. At my request, the Bank of France furnished to me several years ago the following statement as to the mode of having paid said indemnity : Francs. In bank-notes of the Bank of France 125,000,000 In French gold coins 273,003,050 In French silver coins 239,291,875 In German bank-notes 105,039,045 Bills of exchange drawn in thalers 2,485,513,729 Bills drawn on Frankfurt in florins 235,128,152 Bills drawn on Hamburg in marksbancs 265,216,990 Bills drawn on Berlin in reichsmarks 79,072,309 Bills drawn on Amsterdam in florins 250,540,821 Bills drawn on Antwerp and Brussels in francs ._ ._ 295,704,546 Bills drawn on London in pounds sterling. . . . 637,349,832 Total francs 4,990,860,349 Equal to $998,172,069, the dollars reckoned at five francs. The patriotic people of France raised the vast sum by a loan in less than six months from the time the Government appealed to them. Germany expected to receive for years to come 5 per cent, per annum on the indemnity bond ; but the Bank of France, tiirough the French bankers, drew on Germany, England, Scotland and Belgium, and in four months time the whole indemnity was paid. Never in the history of the world has this financial transaction been equaled, and I doubt that any otlier banking institution could have succeeded so well as the Bank of France. Germany expected the payment in gold coin or bullion, having pre- viously and purposely demonetized silver ; but the fact re- mains that actually in gold only 273,003,050 francs, equal to $54,600,610, were paid by the ]3ank of France, and that sum only left France, was remelted in Germany and coined into reichs-marks. England, with her gold standard, had to part with her gold to the amount of 637,349,832 francs, equal to IS4 OUR MONEY WARS. $127,469,964. Bills of exchange on the German bankers throughout the German empire, especially on Hamburg, Ber- lin and Frankfurt, amounted to 3,064,931,180 francs, equal to $612,986,236, nigh on two-thirds of the whole amount of the indemnity. This magnificent stroke of finance on the part of the Bank of France and the French bankers came near ruining the leading German bankers, and forty-one banking houses throughout the German Empire had to sus- pend temporarily, not being able to honor the drafts made upon them. The extravagance of the German people during the war of iSjo-yi brought them into debt to France for luxu- ries, wines, etc., to an enormous extent, and when the Bank of France purchased bills of exchange from the French bankers, who drew on their German correspondents, a panic ensued, and the Germans suffered far more than it is gener- ally believed. Credit Mobilier and Tweed Ring. — In 1871, the Credit Mobilier at Washington, and the Tweed Ring at New York, were exposed. 1872. Earnings in Production and in Banking. — John G. Drew gives the following comparison of American earnings in production and in banking in 1872 : — The average increase of our earnings is three and a half per cent. The Comptroller of the Currency, in his report of De- cember, 1872, shows the net earnings of National banks to be 10 and a third per cent. Add to this rent, salaries, etc., it would be 15. per cent. Street rates are doubtless 20 per cent. Net earnings of banks, for year ending Aug. 31, 1872, are: Milwaukee, 17.93; Iowa, 17.70; Minnesota, 14.36; Missouri, 18.14; Kansas, 15.89; Nebraska, 14.02; Oregon 36.10; Utah, 49.36; Idaho, 38.87 ; ]Montana, 24.30. With three per cent, earnings and 20 per cent, taken by the money-lenders, it follow that the people who are borrower sink 17 percent, a year. This would bring the cleaning-out panic once in six years. As all do not borrow, the panic comes about once in ten years. Preparing for the Panic. — The N. Y. Tribune, in 1875, shows how bravely we were preparing for the panic in 1872 : — From October, 1865 to Oct. 1872, the following changes took place in the principal items of the balance sheets of the National banks : OUR MONEY WARS. ^1% 1865 1872 Private Loans and Discounts. ^487,170,000 $877,198,000 United States Bonds 427,731,000 409,669,000 Loans to Banks and Brokers, 107,372,000 128,181,000 Stocks 19,049,000 23,533,000 Paper Money and Specie 224,308,000 147,140,000 Circulation 171,322,000 333,495,000 Individual Deposits 500,911,000 613,290,000 United States Deposits 48,170,000 12,418,000 Due to Banks 174,200,000 144,836,000 Capital Paid in 393,157,000 679,929,000 The above table shows that the banks took up the business of inflatio7i 7vhen the Government dropped it ; that they in- creased their loans and discounts 80 per cent., at the same time diminishing their cash reserve more than one-third : and also diminishing their United States bonds, while in- creasing their liabilities to depositors, and nearly doubling their circulation. Apotheosis of Jay Gould. — About twenty years ago, Jay Gould was the N. Y. Sun's " master thief." In those days it could not chide in sufficiently strenuous terms, Reid of the Tribune as " Jay Gould's boy." Long after the big Tribune building was erected, the little Sun hung like a hornet upon its flank. But times change. The Sun now has excuses for and praise of Gould, as a " great man." And Dana has long been on fraternal terms with Reid. As the Sun's condemnation of Gould is still fresh in the average memory, I go back still further, and present the Tribime's diatribes upon him, years before he became the owner of that paper, — as a fitting and touching contrast to the Sun's present defence [i88g], and its terrible fulminations against young Ives — as the real " master thief " of the age. Here is an abstract of what I find in the N. Y. Tribune, Nov. 26, 1872. It is given as " a story worth repeating," so I repeat it. It tells how Gould persuaded Daniel Drew to join him in a raid on Erie, and unloaded on Drew — as that worthy had often served his confederates. The Tribune editorial says : " We can watch with composure the robbing of Mr. Drew by Mr. Gould ; and we shall look on with equal com- posure when Mr. Drew gets his turn. * * * But the outside innocents are ground to powder. * * Poor clerks 156 OUR MONEY WARS. who had staked a few spare hundreds on the great lottery, in the hope of adding something to their scanty salaries ; tradesmen who had risked their savings ; professional men who had expected to win enough in \^'all Street to buy Christmas presents for wife and children, or to pay the New Year's bills, — were the victims. * * Mr. Gould was merciful. He took all they had, and excused them from paying the rest." Another editorial from the same paper, just after Stokes shot Fisk. Describing the course of the Fisk and Gould ring, the Tribune said : — They taught the world that be- fore their money, their effrontery and their ingenuity, courts were powerless and law was a mockery. Almost every step in their career was upon a broken statute. They subsidized judges of the Supreme Court to assist them in the illegal over- issue of stock by which they first got a standing in the mar- ket. They used the writ of injunction in so scandalous a manner, in protecting this over-issue, that men began to believe it would be better for the public if ex-parte proceed- ings in equity were abolished altogether. When the officers of the railway company were enjoined from issuing the dis- puted certificates, Mr. Fisk stole them, and threw them on the market. \^'hen attachments issued for this gross contempt, the whole board of directors ran to Jersey City with their money and their concubines. From across the ferry they shouted defiance at judges and laws ; and organized gangs of mercenaries to keep guard about the tavern which they called their fort. They maintained this attitude for weeks; and when they were ready to divide their plunder with the speculators on tMs side of the river, they made their bargain, came over in broad daylight, and laughed at the Supreme Court. We have more than once' told the history of this shameful pro- ceeding ; by which the road was first robbed of ^9, 000,000, and then handed over to Fisk and Gould as their personal property. And what became of the order of arrest ? Why, Judge Barnard put it in his pocket, and entered the service of the men against whom it had been issued. The degradation of the bench was now complete. At Fisk's call, Barnard left his mother's death-bed, in Pough- keepsie, to sign outrageous ex-parte orders (if, indeed, his signature was not fraudulently affixed afterward) in the apart- ments of Fisk's mistress. At Fisk's order, the telegraph OUR MONEY WARS. 157 was used to serve writs in Albany, purporting to be issued in New York. At Fisli's demand, when the great gold con- spiracy broke down, 28 injunctions were sued out to save the conspirators from the consequences of their ruined enter- prise ; and men whom they had swindled were forbidden to appear in court, except in the character of criminals. At Fisk's behest, when the English attempted to save their depreciating property, Barnard seized 60,000 shares of stock, and placed them virtually in Fisk's hands, to be voted with and canceled. At Fisk's order, the Supreme Court became a tool of the Erie Company, in its raid upon the Albany and Susquehanna road ; and persecuted Ramsey with injunctions and fraudulent actions ; which have only been dropped since the death of their prime mover. And as corruption on the bench spreads downward, and destroys, in time, the moral dignity and purity of the bar, so it was possible for these vulgar rogues to use as the instruments of their misdeeds a distinguished advocate whose sense of honor had been de- scribed as Quixotic. Germany Kicks. — 840 business associations of Germany, largely agricultural, petitioned that Government, in 1S72, to return to the silver standard. A Warning Silver Prophet.* — Gen. A. J. Warner, in 1879, quoted in Congress the following, as the utterance of Ernest Seyd, the English economist, in 1872. This shows what strong warnings the world had about silver : — The demone- tization of silver, abstracting say 40 per cent, from mediums of exchange, — or rather the violation of the contract basis upon which these relations now rest, — will be tantamount to a gratuitous addition to the power of invested capital and fixed income ; while labor and property will fall in value. Whether the result takes place suddenly or gradually (as the advocates of the gold valuation put in for an excuse), the principle involved remains the same. The wrong remains * A mystery still unexplained in 1893 hangs over the man Ernest Seyd. He appears as a sort of Dr. Jekyll and Mr. Hyde in our finances. I have sometimes thouglit the names Seyd and Loyd have been mixed in somebody's manuscript. Here now we have Ernest Seyd as a very wise bi-metalist, and again we have an lirnest Seyd appearing with a half million of dollars to buy up our Congress and get silver demone- tized in 1873. Will somebody explain ? Did the Shylock-Sherman combine seduce him ? IS8 OUR MONEY WARS. paramount. Thus the value of all State debts (in themselves immoral) would increase greatly ; the burden of taxation would become the heavier in proportion ; and labor would become more enslaved than ever. There are persons who allege that the additional supply of gold might soon make up the difference. The folly of this assertion equals that of a man who wantonly scuttles his ship, in the hope and expecta- tion that he might get another to replace it. England's Five Eillions of Credit Money. — The credit money of England was reckoned at five billion dollars in 1872, as follows : — An English writer quoted by Henry Carey Baird gives these figures in dollars : Gold and silver in Great Britain $339,500,000 Circulation of Bank of England notes 166,500,000 Other bank-notes in Great J3ritain in 1872 85,425,000 ?S9i>42S.ooo R. H. I. Palgrave says that the deposits of the British banks were, in 1871, — $2,900,000,000. He estimates from sales of stamps for bills payable, their average amount at any one time as $1,200,000,000. He estimates the private or other debts, — for which no bills are given by nobility and gentry, — at the same figures. So we have Bank deposits $2,900,000,000 Bills of exchange 1,200,000,000 Private debts .' 1,200,000,000 >5, 300,000,000 All this is payable on demand by the less than 600 million of money. OUK MONMY IVAK^. IS9 CHAPTER XIV. 1873 to 1880. SEVEN YEARS OF FAMINE IN" A LAND OF PLENTY. 1873. The Demonetization of Silver. — The first great financial event of 1873, is one that should make those who caused it feel very small — namely — the demonetization of silver on February 12. The recent, utterance of the able Peoria, \\\.,Jonriml, makes a good opening on this question. It said, in substance : — On December 16, 1872, a bill relating to mints, assay offices and coinage was reported to the House from the Senate by Sherman. It had been prepared two years before, by the agent of the foreign bankers, the New York Chamber of Commerce and John J. Knox, — who was then Coinptroller of the Currency. It provided for a thorough change in our silver coinage ; on a plea of equalizing it with that of France. The real object was to drop the silver dollar. Sherman said the bill had passed the Senate, at its last session ; and he proposed to modify only a single section. He wished the Senate to pass it without reading. Senator Casserly of California opposed the bill. It w?.s ordered printed and read. When it was put upon its passage in the Senate, January 17, 1873, Sherman added 17 amendments to it instead of one. The House disagreed with his amendments ; and then he made his favorite movement for a conference committee, with himself at its head. When he had con- vinced the committee that they did not know anything about the coinage system of the United States, he introduced the following amendment, which was passed : "That any owner of silver bullion may deposit the same at any mint, to be formed into bars or into dollars of 420 grains troy, desig- nated as trade dollars, and no deposit of silver for other coinage shall be received." These are the few lines that abolished the l6o OUR MONEY WARS. coinage of the old 41 2 J grain silver dollar. Mr. Sherman was anxious to have free coinage for the Chinese, but not a single dollar for the people of this country ; although they were involved in a debt of over $2,000,000,000 occasioned by the war of the Rebellion ; to say nothing of municipal, township, county and State indebtedness. At the time that silver was degraded there was, all told, according to the re- ports of the different Secretaries of the Treasury, less than $2,000,000 of silver in the Treasury, and only ibout $5,000,000 in private and National banks, and in the hands of private individuals. Senator Jones of Nevada said in 1890 : — And again in 1873, when all bonds provided for by the Refunding Act of 1870 had been sold, and had passed out of the hands of the Government, another act was passed, intended by the money- lenders again to strengthen the public credit ; and again to the disadvantage of the people, and to the exclusive and en- ormous advantage of the bond-holders. It bore the innocent title of " an act revising and amending the laws relative to the mints, assay offices and coinage of the United States." This act, bearing on its face no suggestion of any change more serious than that of regulating the petty details of mint management, — has proved to be an act of momentous consequence to the people of this country. This is the act that demonetized the silver dollar ; which it did by merely omitting that coin from the enumeration of the coins of the United States. Ernest Seyd. — Another writer says : The English capital- ists raised $500,000 and sent one Ernest Seyd to America to have silver demonetized. He came. In the bill was skillfully inserted the clause demonetizing silver. Before the bill passed a member of the committee which had it in charge stated that : " Ernest Seyd of London, a distinguished writer and bullionist, who is now here, has given great attention to the subject of mint coinage. After having examined the first draft of this bill, he has made various sensible suggestions which the committee adopted and embodied in the bill. .Congressional Record, April 9, 1872." The money kings of the world knew what they were about. They had determined to control and enslave labor by means of their control of the world's money. They had determined OUR MONEY WARS. l6l not only to preserve the barbaric idolatry for metal money, but concentrate that idolatry on gold alone. Gold was brilliant and fascinating in color, it was heavy, but not bulky. It could be easily transported or hoarded. Silver should be stricken down, and half the money metal of the world be made a mere commodity like iron. Gen. Warner said in 1879 : — Mr. Sherman, in January, 1868, being then Chairman of the Committee on Finance in the Senate, introduced a bill to change the gold coins of the United States, so as to make them correspond with the French 25 franc piece ; and to make the silver half-dollar correspond in weight to two and a half silver francs, and dropping the dollar entirely. The bill as introduced in the House, however, contained a dollar piece. This piece was afterward dropped, and the trade dollar substituted. The words now incorporated in section 35 11, making the gold dollar the sole unit of value, were embraced in the bill as first introduced by Mr. Hooper. Who suggested this provis- ion, or whose hand framed it, does not appear ; and no one has had the courage to own it. Suffice it to say that no heavier hand was ever lifted against this country. While the bill was under consideration in the House, ex- cept a mere allusion by Mr. Hooper and Mr. Potter, there is not a single word in the discussion that took place, then or afterward, in the House or in the Senate, indicating that any- body understood that a change was to be made in the stand- ard of value in the United States ; or that this was part of a concerted movement to drop silver from the money of the world. From the discussion that took place, — which per- tained altogether to other matters ; such as minor coins, and whether the eagle should be retained on fractional silver pieces or not, — it was evident that nobody contemplated any such thing, or knew that a provision was in the bill making such a change in our monetary standard. If further evidence of these facts were needed, we have it in the vote taken in this House in April, 1874, — more than a year after the passage of Mr. Hooper's bill, — on a resolution by a distinguished member from Massachusetts (Mr. Hoar) * * * A distinguished senator from New York [Conkling] a few days later, asked, apparently in astonishment, if it was true that there was by law no American dollar. Not an in- timation was given to the country by the public press any- 1 62 OUR MONEY WARS. where that such a change was contemplated. You will search in vain the journals of the country to find any- where a hint of such a thing. Doubtless there were those who understood it. The money-dealers of Wall Street, of Lombard Street, of the Bourse of Paris and of Hamburg understood it. They knew Ricardo by heart : they knew the history of such changes in other times ; and they knew the history of resumption in England ; and they knew very well what would be the effect of such an alteration in the standard, — with national debts aggregating $25,000,000,000. The cunning knavery concealed under the impenetrable dis- guise thrown around the bill, at the time of its passage, has come finally to be the most marked feature of the whole measure. I repeat that the bill passed through the Senate, without even being read through, and without one single word in the debate upon it there to indicate any change in the metallic standard. But we have evidence from another source that no such thing was in the minds of the chief officers of the Government. The President, who signed the bill, evidently was not aware of the covert provisions it contained. Nobody need believe that John Sherman did not know all those years what he was doing : though he pretends that he did not. It is evident that he got into the conspiracy soon after Germany demonetized silver. More candid was Dr. Linderman, director of the mint, who, in his testimony before the United States monetary commission of 1876, said : " Within thirty days after the policy of Germany had been determined upon, of course everybody saw and everybody knew, that to carry out that policy, Germany must get rid of two-thirds of her silver and put an equal amount of gold in stock. That would make an immediate draft on gold stocks in the market, and brokers commenced to charge a difference and the decline of silver commenced immediately." Warwick Martin said in 1880: "That Mr. Richardson, Secretary of the Treasury, in the fall of 1873, did not know of or understand the law, is evident from the fact that, months after its passage, he recommended immediate re- sumption of specie payments in silver, and made a vain at- tempt to carry out his recommendation. That the President, though he had signed the bill, did not understand its effect, OUR MONEY WARS. 163 is evident from the fact that he afterward wrote a letter ad- vocating the payment of silver ; and stating that we ought to have $300,000, 000 of silver coin in circulation." The allegation that the Mint of the United States in 1873 had ceased to coin silver dollars, has no foundation in truth ; for in 1870, 1871, 1872 and three months in 1873, there were coined a larger amount of silver dollars than ever be- fore in the same period, as follows : In 1870, $588,308 ; in 1871, $659,929 ; in 1872, $1,112,961 ; in 1873 (three months), $977,150. These seem small, unimportant figures, but an i.M.MENSE fact is deducible from them. The long heads saw that since silver had got as cheap as gold, and was likely to be cheaper, a vast amount of it would be coined, and this would destroy their scheme for a universal gold basis, unless silver should be demonetized. This idea I have not seen else- where stated. Senator Teller said in 1890 : — Mr. President, the Act of 1873 was equivalent, as I have said before, to adding to every deljt in the land, private and pubhc, if to be paid to-day, from 30 to 33 per cent, more than the party contracted to pay. Suppose the attempt had been made by the creditor class by law to add to their holdings 30 per cent., to compel the debtor to give them 30 per cent, more of money or pro- ducts, the whole country would have been in arms ; there would have been revolution and war, and rightfully, too. Warwick Martin says : — Under the law of 1873, the trade dollar was created. It contained 420 grains standard silver, and was made legal tender for $5 only. In 1876 this dollar was declared legal tender for nothing. In 1878 the dollar of 41 2|- grains was again monetized. The trade dollar, for want of legal value, was worth only 90 cents. The dollar of 412^ grains was and is 100 cents; because legal tender to any amount. The commercial value of the metal in the trade dollar is 7^ grains greater than in the other dollar. But the one has legal value and the other has none. TIms makes the difference. The only good that was ever derived from this dollar is the complete proof of our proposition. The law makes and unmakes the money. Here is the wording of the bill after Mr. Hooper's tinker- ing: " That the silver coins of the United States shall be a dollar, a half dollar, or 50-cent piece; a quarter dollar, or 25- 164 OUR MONEY WARS. cent piece; a dime, or lo-cent piece. The weight of the dollar shall be 384 ; the half dollar, the quarter dollar and dime shall be, respectively, one-half, one-quarter and one- tenth of the weight of said dollar. Which coins shall be a legal tender, at their nominal value, for any amount not exceeding five dollars in one payment." This section was stricken out by the Senate Committee, and the following inserted : " That the silver coins of the United States shall be a trade dollar ; a half dollar, or so-cent piece ; a quarter dollar, or 25-cent piece ; a dime, or lo-cent piece. The weight of the trade dollar shall be 420 grains troy, the weight of the half dollar shall be i2t^- grammes, the quarter dollar and the dime shall be, respectively, one- half and one-fifth of the weight of the said half dollar. Said coins shall be a legal tender at their nominal value in any sum not exceeding five dollars in any one payment." Observe the cunning trick of leaving off "grains troy" after the "384 " and the use of "grammes " instead of the usual number of grains in the second version. To substantiate the greatness of the great fraud of 1873, the following points are added from the records : — John Sherman seeks to create the impression that the de- monetization of silver was well understood by the senators and representatives at the time they voted for it. He justi- fies his vote for it, and yet at the same time seems quite anxious to divide the responsibility with others. Hon. W. D. Kelley, Chairman of the Coinage Committee of the House, did not know that the bill demonetized silver, though he reported the bill. Garfield did not know it; Blaine did not know it. They were both then members of the House. Conkling did not know it. So these gentlemen asserted, and they were certainly as truthful as Old Sherman. Sherman, in his opening speech of the late campaign, delivered at Paulding, Ohio, August 27, 1891, in regard to the bill of 1873 demonetizing silver, said : " The Act of 1873 was not an act of the party then in power, but it was an act of all parties. It was voted for by Democrats and Repub- licans alike, after full consideration for three years in Con- gress. It was voted for by every representative from the silver States." Now, we want to prove Sherman a prevaricator. From OUR MONEY WARS. 165 the history of the Act of 1873 and the Act of 1878, we copy the following : — Judge Kelley, of Pennsylvania, was Chairman of the Committee on Coinage, Weights and Measures in. 1872, when the bill originally passed the House. This is what he said en the floor of the House March 9, 1878 : — In connection with the charge that I advocated the bill which demonetized the standard silver dollar, I say that, though the Chairman of the Committee on Coinage, I was as ignorant of the fact that it would demonetize the silver dol- lar, or of its dropping the silver dollar from our system of coins, as were those distinguished senators, Messrs. Blaine and Voorhees, who were then members of the House, and each of whom, a few days since, interrogated the other : " Did you know it was dropped when the bill was passed ? " " No," said Mr. Elaine ; " did you ? " " No," said Mr. Voor- hees. I do not think that there were three members in the House that knew it. I doubt whether Mr. Hooper, who, in my absence from the Committee on Coinage and attendance on the Committee of Ways and Means, managed the bill, knew it. I say this in justice to him. — (Congressional Record, volume 7, part 2, Forty-fifth Congress, second ses- sion, page 1605.) Mr. Holnian, in a speech delivered in the House of Rep- resentatives July 13, 1876, said : — I have before me the record of the proceedings of this House on the passage of that measure, a record which no man can read without being convinced that the measure and the method of its passage through this House was a " colossal swindle." I assert that the measure never had the sanction of this House, and it did not possess the moral force of law. — (Congressional Record, volume 4, part 6, Forty-fourth Congress, first ses- sion, appendix, page 193.) Again, on August 5, 1876, he said : — The original bill was simply a bill to organize a bureau of mines and coinage. The bill which finally passed the House and ultimately be- came a law, was certainly not read in this House. * * * * It was never considered before the House as it was passed. Up to the time the bill came before this House for final pas- sage, the measure had simply been one to establish a bureau of mines ; I believe I use the term correctly now. It came from the Committee on Coinage, Weights and Measures. The substitute which finally became a law, was never read, l66 OUR MONEY WARS. ■ and is subject to the charge made against it by the gentle- man from Missouri (Mr. Bland), that it was passed by the House without a linowledge of its provisions, especially upon that of coinage. I, myself, asked the question of Mr. Hooper, who stood near where I am now standing, whether it changed the law in regard to coinage. And the answer of Mr. Hooper cer- tainly left the impression upon the whole House that the sub- ject of the coinage was not affected by that bill. — (Congres- sional Record, vol. 4, part 6, Forty-fourth Congress, first ses- sion, page 5237). Mr. Cannon, of Illinois, in a speech made in the House on July 13, 1876, said : — This legislation was had in the Forty- second Congress, February 12, 1873, by a bill to regulate the mints of the United States, and practically aTaolished silver as money, by failing to provide for the coinage of the silver dollar. It was not discussed, as shown by the Record, and neither members of Congress nor the people understood the scope of the legislation. — (Ibid., appendix, page 197). Senator Conkling, in the Senate, March 30, 1876, during the remarks of Senator Bogy on the bill (S. 264) to amend the laws relating to the legal tender of silver coin, in surprise, inquired : — Will the Senator allow me to ask him or some other senator a question .' Is it true that there is now by law no American dollar ? And, if so, is it true that the effect of this bill is to be to make half dollars and quarter dollars the only silver coin which can be used as a legal tender ? Mr. Bright, of Tennessee, said of the law : — It passed by fraud in the House, never having been printgd in advance, being a substitute for the printed bill ; never having been read at the clerk's desk, the reading having been dispensed with by an impression that the bill made no material altera- tion in the coinage laws ; it was passed without discussion, debate being cut off by operation of the previous question. It was passed, to my certain information, under such circum- stances that the fraud escaped the attention of some of the most watchful as well as the ablest statesmen in Congress at the time.* * * Ay, sir, it was a fraud that smells to heaven. It was a fraud that will stink in the nose of posterity, and for which some person must give account in the day of retribu- tion. — (Record, vol. 7, part i, second session, Forty-fifth Congress, page 584.) OUR MONEY WARS. 167 General Garfield, in a speech made at Springfield, Ohio, during the fall of 1877, said :. — Perhaps I ought to be ashamed to say so, but it is the truth to say that, at that time being chairman of the Committee on Appropriations, and having my hands overfull during all that time with work, I never read the bill. I took it upon the faith of a prominent Democrat and a prominent Republican, and I do not know that I voted at all. There was no call for the yeas and nays, and nobody opposed that bill that I know of. It was put through as dozens of bills are, as my friend and I know, in Congress, on the faith of the report of the chairman of the committee ; therefore I tell you, because it is the truth, that I have no knowledge about it. Senator Allison, on February 15,, 1878, when the bill (H. "R. 1093) to authorize the free coinage of the silver dollar was under consideration said : " But when the secret history of this bill of 1873 comes to be told, it will disclose the fact that the House of Representatives intended to coin both gold and silver, and intended to place both metals upon the French relation instead of on our own, which was the true scientific position with reference to this subject in 1873, but that the bill afterward was doctored, if I must use the term, and I use it in no offensive sense, of course " Mr. Sargent interrupted him and asked him what he meant by the word " doctored." Mr. Allison said : " I said I used the word in no offensive sense. It was changed after discussion, and the dollar of 420 grains was substituted for it." — (Congressional Record, volume 7, part 2, Forty-fifth Congress, second session, page 1058.) On February 15, 1878, during the consideration of the bill above referred to, the following colloquy between Sen- ator Blaine and Senator Voorhees took place : Mr. Voorhees. — I want to ask my friend from Maine, whom I am glad to designate in that way, whether I may call him as one more witness to the fact that it was not generally known whether silver was demonetized. Did he know, as Speaker of the House, presiding at that time, that the silver dollar was demonetized in the bill to which he alludes? Mr. Blaine. — I did not know anything that was in the bill at all. As I have before said, little was known or cared on the subject, [Laughter.] And now I should like to ex- 1 68 OUR MONEY WARS. change questions with the Senator from Indiana, who was then on the floor, and whose business it was, far more than mine, to linow, because by the designation of the House I was to put questions; the Senator from Indiana, then on the floor of the House, with his power as a debater, was to un- fold them to the House. Did he know ? Mr. Voorhees. — I very frankly say that I did not. — (Ibid., page 1063.) Senator Beck, in a speech made in the Senate, January 10, 1878, said : — It [the bill demonetizing silver] never was understood by either House of Congress. I say that with full knowledge of the facts. No newspaper reporter — and they are the most vigilant men I ever saw in obtaining infor- mation — discovered that it had been done. — (Congressional Record, volume 7, part i. Forty-fifth Congress, second session, page 260.) Mr. Thurman said : — " I cannot say what took place in the House, but I know, when the bill was pending in the Senate, we thought it was simply a bill to reform the mint, regulate coinage, and fix up one thing and another ; and there is not a single man in the Senate, I think, unless a member of the committee from which the bill came, who had the slightest idea that it was even a squint toward demonetiza- tion." On January 14, 1875, the same date that he signed the Resumption Act, President Grant sent a special message to Congress, advising the establishment of two or more mints at Chicago, St. Louis and Omaha to coin silver dollars to provide for resumption. In this message General Grant said : " With the present facilities for coinage it would take a period probably beyond that fixed by law for final specie resumption to coin the silver necessary to transact the business of the country." [My understanding has been that Sherman in the Senate and Hooper in the House understood and passed the bill. — S. L.] The Secretary of N. Y. Chamber of Commerce. — This man, John Austin Stevens Jr., who, 30 years before, was a neighbor and boy companion of the writer, put a piece in the N. Y. Times in 1873 that was much used at the time by J. G. Drew and other writers. He said : — The country at large has felt the pressure of the screw, but they have not been OUR MONEY WARS. 169 able to discover precisely from what quarter the pinch comes, because the currency contraction was mostly confined to those Treasury notes which, though not currency in the strict sense of the term, were used as such in the larger transactions of trade and financial exchange. The Great Panic of 1873. — Judge Kelley gives this valu- ablesketch of the wayin which the thunderbolt fell in 1873 : — In 1865-6, as I have shown, business was on a cash basis. Few business men were borrowing money for any purpose ; the rate of interest was low ; and there was employment, at liberal wages, for everybody who could and would work. My venerable friend, Henry C. Carey, and I, during the month of August, 1873, visited the Northwest. In the course of our travels, we noticed the fact that savings-banks in Pittsburg were publicly offering seven per cent, for deposits, and we were assured, by reputable business men connected with some of these institutions, that they were privately pay- ing higher rates. We had already learned that eight per cent, was being offered by such institutions in Chicago, and had heard that higher rates were paid. We did not hesitate to predict a speedily coming financial crisis ; and a promi- nent banker of Chicago, in response to our predictions, asked why we had come among them as prophets of evil, in the midst of such abounding evidences of present and pros- pective prosperity. To which, Mr. Carey replied by asking, " At what rates of interest savings-banks must be lending money, when they could undertake to pay eight or ten per cent, for deposits ? " That conversation occurred on August 18, in one of the parlors of the Grand Hotel. When we re- turned to Philadelphia, we found that the acceptances of merchants of excellent standing, and of the leading transpor- tation companies whose offices were in the city, were being hawked upon the market at the rate of 12, 15 and 18 per cent, per annum ; and that much paper was paying at the rate of 24 per cent. As the money of the country had been withdrawn, men who were engaged in enterprises must bor- row credit, and in desperate efforts to struggle against fate, — after our contraction policy had decreed their ruin, — were, in the hope of making a fortunate turn ; and seeing bankruptcy before them if they could not make such a turn, borrowed at any rate. Precisely one month from the interview referred to, on 170 OUR MONEY WARS. September 18, the great house of Jay Cooke & Co. sus- pended ; and in a few days thereafter the National banks of New York city also closed their doors against their deposi- tors, whose checks they were unable to pay, either in Green- backs or their own notes ; instead of which they issued certificates of deposit, which rapidly depreciated to 94 or 95 per cent, in Greenbacks. John E. Williams, President of New York Metropolitan Bank, and a famous Greenbacker, said in 1875 : — ^In my letter to Senator Sherman, (under head 5), I discussed this point at some length. A close examination of the panic oi 1873 sheds additional light, however, on the question, Then the aggregate quantity of circulation was set down at 800 millions — about equally divided between legal-tender and National bank notes. It is now quite evident, from the record of the operations of September and October, 1873, that 800 millions were not only not too much, but certainly too little for the emergency. As proof of this, early in Septem- ber, gold was at a premium of 16 per cent.; between that time and October 11, it fell to 8:|- per cent., about one-half ! While currency, — the well-abused, scandalous currency [Greenbacks], — during that six weeks, rose in the market, and sold at from 103-5- to 104 — four per cent, above nominal par ! If this does not show that more paper rather than more gold was wanted to relieve the extraordinary pressure, then figures go for nothing ! Mills stopped for want of cur- rency, in cases where owners were worth millions ; railroads, coal-mines, and all sorts of manufactories found it difficult to get currency to pay their hands. Later, it is true, the scarcity alarmed persons who had notes to pay, and they locked up in their safes currency to meet their indebtedness. But the overwhelming demand was from the West. Sight drafts on this city against grain shipped, amounted, at one time, to a million dollars a day. The crop was large, foreign demand good, farmers anxious to realize, Europe ready to buy, at full prices ; and hence the heavy shipments, with un- precedented drafts. At the rate of a million a day, a single month would take out of the city 25 millions. True, the cheap money of the preceding summer, to this amount, or more, had been loaned to brokers and others, on call ; but when the call came, the currency had been sent OUR MONEY WARS. 171 away, the debtors could not pay, — the bank vaults were emptied of the currency they relied upon. The panic of 1873 occurred under somewhat remarkable circumstances. Our foreign trade was thought to be in our favor. We were importing specie at that time ; but that afforded no relief ; in fact, was regarded, even by bullion- ists, with disfavor. What the public hungered and thirsted for was Greenbacks, — or even bank bills. But no more of these could be had ; — they had emigrated — gone \\'est ! Judge Martin says : — The running up of gold from 25 premium to 60, terminating in " Black Friday " in 1869, and the terrible crisis of September, 1873, were caused [immediately. — S.L.] by the provision of the banking law, which allows banks in money centers to pay interest on the deposits of coun- try banks. To make the interest they are compelled to use the money in some way. They cannot discount paper upon these deposits, as they are liable to be drawn for at any mo- ment. They dare not loan this money to merchants or manufacturers, or for business of any kind. They, therefore, loan it on call to stock gamblers. This was extensively done in the fall of 1873. The Western and Southern banks and bankers needed their money thus deposited in New York, and drew for it. It could not be paid' by the New York banks. Th^ banks called on the stock gamblers for pay- ment. They could not respond. There was no sale for stocks. The stock board was closed for two weeks. Several large banking-houses and two or three banks failed. All the National banks in the city suspended currency payments, and issued $30,000,000 Clearing-house certificates, which passed as money between the banks. These banks would have failed, and been put into the hands of receivers, but for the fact that the Secretary of the Treasury advanced these National banks $26,000,000 legal-tender notes. These banks received on deposit all the money they could get ; but they marked checks " good," and did not pay them at that time. * * * The President of the Gallatin National Bank, and other bank officers, attributed this crisis to this one cause, and labored to break up the practice; but they were unsuccessful. Mr. Richardson, Secretary of the Treasury, laid the matter before Congress, and insisted upon the pas- sage of a law prohibiting National banks from paying inter- 172 OUR MONEY WARS.- est on deposits. But Wall Street, as usual, was too strong for Congress. The Bank Inflation — Is well illustrated in the follow- ing extract from the report of the nine presidents of Associated Banks of New York, who had been appointed to report a revision of the Clearing-house system after the panic of 1873 : — Deposits which are derived from strictly commer- cial operations cannot fluctuate so widely, from time to time, as to produce disturbance in the community : and banks which confine their business to them, as they naturally arise, are always reliable and regular in the treatment of their dealers ; and can be conducted with ease and comfort to their managers, and safety to the public. On the contrary, deposits which are purchased by payment of interest, or otherwise ; and which must, therefore, of necessity, be largely loaned " on demand ", are the cause of continual agitation and solicitude, to those who hold them in charge. They are certain to be withdrawn at the season of the year and at the moment most inconvenient to the banks, and to their dealers. This fact is best illustrated by the following iigures : The average deposits of the 60 Clearing-house banks for 10 weeks, from July 5 to Sept. 6, were $232,228,000 The lowest amount reached since the panic was 143,170,000 Showing a total reduction of $89,058,000 Of the above amount during the 10 weeks, 12 interest-paying banks held $111,585,000 The lowest total reached by them since the panic $52,609,000 Showing a loss in 12 banks of $58,916,000 And in the other 48 banks of $30,142,000 And were it not for the fact that several of the 48 banks are more or less involved in the same practice, this disparity would be still more apparent. On the other hand, see The Legal-tender Contrac- tion : — The following statement was taken from the books OUR MONEY WARS. 173 of the Treasury Department by Moses W. Field. It ex- hibits the contraction of the circulating medium, from Sep- tember I, 1865, to December i, 1873, exclusive of coin ; Currency, September i, 1865. U. S. Notes -. $433,160,569 Fractional Currency 26,344,742 National Bank-notes 185,000,000 Compound Interest Legal-tender Notes. . . . 217,024,160 Treasury 5 per cent Legal-tender 32,536,991 Temporary Loan Certificates 10 — d — d. . . . 107,148,713 Certificates of Indebtedness 85,093,000 Treasury Notes past due Legal- ) tender and not presented j o .)> - State Bank Notes 78,867,575 Three-Year Treasury-notes 830,000,000 $1,996,678,770 Circulating Medium, Exclusive of Coin, Dec. i, 1873 : U. S. Notes $367,001,685 Fractional Currency 48,000,000 Certificates of Indebtedness bearing interest . . 678,000 National Bank Currency 350,000,000. Total Dec. i, 1873 $765,679,685 $1,996,678,770 765,679,685 Contraction $1,230,999,085. That deep-thinking merchant W. H. Winder, in explaining the panic of 1873 — before a Congress committee in 1878 — made excess of imports (one of the results of contraction) a prominent cause. He said : " Imports in panicky '73, were 642 millions, or 300 millions more than in 1868, or six times those of 1833 (101 millions). For five years prior to 1873, the imports were 579 millions more than the exports; and for ten years they were 1,127 millions — facts not before noted." Now hear a pompous " conservative," David A. Wells, talk about, without even attempting to explain, our panic. He sagely enumerates " phenomena antecedent," This 174 OUR MONEY WARS. poor creature, who was one of a half a dozen men most re- sponsible for the " Hard Times," sneaks away from the facts as follows, in 1887 ; — David A. Wells in Popular Science Monthly for July : The period of economic disturbance, which commenced in 1873, appears to have first manifested itself, almost simultaneously, in Germany and the United States, in the latter half of that year. [?] In the former country, the great and successful results of the war with France had stimulated every department of thought and action among its people into intense activity. The war indemnity, which had been exacted of France, had been used in part, to pay off the debt obligations of the Government ; and ready capital became so abundant that banking institutions of note almost begged for opportunity to place loans at rates as low as one per cent., with manufacturers, for the purpose of enlarging their establishments. As a legitimate result, the whole country projected and engaged in all manner of new industrial and financial undertakings. In Prussia alone, 687 new joint- stock companies were founded during the year 1872, and the first six months of 1873 ; with an aggregate capital of ^481,045,000. Such a state of things, as is now obvious, was most unnatural [?], and could not continue ; and the reaction and disaster came with great suddenness, as has been already stated, in the fall of 1873 ; but without antici- pation on the part of the multitude. Great fortunes melted rapidly away ; industry became paralyzed ; and the whole of Germany passed, at once, from a condition of apparently great prosperity to a great depth of financial, industrial and commercial depression that had never been equaled. [Mark — no cause at all given for this. — S. L.J In the United States, the phenomena antecedent to the crisis were enumerated at the time to be — " a rise of prices, great prosperity, large profits, high wages and strikes for higher, large importations, a railway mania, expanded credit, overtrading, overbuilding and high living." [Mostly bosh, as to 1873]. The crisis began on September 17, by the failure of a com- paratively unimportant railway company — ^the New York and Oswego Midland. On the'i8th the banking house of Jay Cooke & Co. failed. On the 19th, 19 other banking-houses failed. Then followed a succession of bankruptcies, until, in four years, the mercantile failures had aggregated $775,865,- OUR MONEY WARS. 17s 000; and on January i, 1875, the amount of American rail- way bonds in default amounted to $789,367,655. How lurninous is Sir Oracle, in the above ! All through this book the real causes of the hard times are found. He says nothing of the great fact that silver demonetization was a chief cause in both Germany and the United States. His state- ment that Germany went heavily into manufactures, and failed at it, is very interesting in view of the fact that France, the conquered country — that did not demonetize silver, but flooded itself with paper — rushed its industries — its manu- factures, with such success that it paid Germany three- quarters of the milliard indemnity in goods and German securities ! and killed all those German factories ! The Broken Banks and Trust Companies. — On Oc- tober 23, 1873, a nine-column article by Samuel Leavitt was printed in the N. V. World, which gave a full review of the New York bank suspension since the Tweed epidemic of 187 1-2 ; the condition of the broken banks, and the prospects of their depositors. The State banks discussed were the Stuyvesant, Davis Collamore, Prest., which failed Oct. 13, 187 1; the Bull's Head, Richard \^'illiamson, Prest., failed March 20, 1873. The National banks were : The Ocean, Columbus S. Steven- son, Prest., failed Dec. 1871 ; The Union Square, Henry Beekman, Prest., failed Dec. 13, 1871 ; The Eighth National, Union Adams, Prest., failed Dec. 13, 1871; The Atlantic, J. E. Southworth, Prest., failed April 26, 1873 ; The Com- monwealth, George Ellis, Prest., failed Sept. 20, 1873. The savings banks that failed then and afterwards in- cluded all those on Third Avenue. Naturally enough, their bank buildings were all turned into drinking-saloons ; — dis- couraged depositors concluding to spend their own money, in a way that would give a definite and immediate pleasur- able result. Government was much to blame in allowing savings banks to fail, and thus rob the poor. These banks were : The Guardian, W'm. j\[. Tweed, Pres- ident, failed November 18, 187 1 ; The Bowling Green, Police Commissioner Henry Smith, President, failed Novem- ber 18, 187 1 ; The National, John McBride Davidson, the Tweed safe-maker. President, failed November, 18, 187 1 ; The Market, Wm. Van Name, President, failed January 21, 176 OUR MONEY WARS. 1872 ; The Central, Charles Peck, President, failed January 4, 1872. The Trust Companies were : Brooklyn Trust Co., Ethelbert 5. Mills, President, failed January 19, 1873 ; The Union Trust Co., failed September 20, 1873. The Stuyvesant people- blamed the Chicago fire. The Bull's Head was robbed of $257,000 — thief never known. It recovered. The Ocean was first crippled by a big burglary of $100,000 through a tunnel. The Union Square and Eighth National were upset by the Ocean. The Atlantic was robbed of $400,000 by F. L. Taintor, cashier. He went to jail. The Commonwealth was broken by Edward Haight & Co. overdrawing $225,000 before their failure. The three Tweed banks need no explanation. Henry R. Conklin, Secretary of the Market, stole $550,000 and went to Canada ; the Pres- ident, Van Name, went to Ludlow Street jail. Was there when the article was written. The Central was crippled by the Ocean. The Brooklyn Trust Co. was in bad hands : the President Mills, the Secretary M. T. Rodman, and the Treas- urer Sprague, were all apparently defaulters. Mills was drowned (suicide, I believe). Sprague and Rodman — who were Treasurer and Deputy Treasurer of Brooklyn — were in durance vile when the article was written. The Union Trust Co. was broken by the theft of $400,000 by C. T. Carlton, Secretary. It has since been set up in great shape under Edward King, of James G. King's Sons. This picture is given as a specimen of the liveliness of the frisky days of Tweed, Fisk, Gould & Co. A \\'isE English Opinion. — In 1873, the Westminster Review, in an article on "The J\Iint and The Banks" uttered these wise and weighty words : — In breaking this monopoly of the banks, we should be taking great strides toward the attainment of that ideal system of currency which Sir Robert Peel must have had in his heart [certainly not in his head! — S. L.] when he passed his currency laws ; a system in which the State shall be the sole fountain of issue ; under which no money shall circulate on credit ; or, if it does, shall circulate on the credit of the State ; all bank notes as well as coins, bearing the image and superscription of the head of the State ; and under which all profits upon the issue of money shall form a part of the imperial revenue, * * * The power of issue now exercised by the Bank of England, and by the OUR MONEY WARS. 177 English, Irish and Scotch banks [all private corporations] is a relic of feudalism. * * * The private manufacture of coin has been suppressed long ago ; but the manufacture of paper money still remains. And the profits of this manufacture are allowed to remain in private hands : the State taking upon itself the manufacture of the only part of the currency upon ■which there is, and can be, a loss. It is high time this state of things ceased ; that all right of issue were gathered into the hands of the State ; that the djbt of the Bank of England were paid off ; that all notes but those of the State were suppressed ; that the power of issue, now exercised by the banks, were vested in the royal mint, * * and that the profits upon paper currency were claimed by the State and appro- priated, * * to the reduction of taxation. 1874. Little Chit on Banks. — A rich Brooklyn conservative — Congressman Chittenden, said before the Committee of Banking and Currency of the House, Jarruary 16, 1874 : — I believe that of those 1900 National banks there are not two- thirds of them sound to-day. I mean not two-thirds in num- ber. In the vast proportion of them, the capital is very small. I know, for instance, how one National bank was established, and I presume there were hundreds established in the same way. I say I know a National bank of $100,000 capital, whose broker in New York purchased $100,000 of Government bonds, and paid for them. The' owners of the bank furnished the margin between the 90 per cent, in cur- rency, which they were allowed on the deposit of the bonds and the cost of the bonds ; and that margin was all the capital that was ever put into the bank. The broker sent the bonds to Washington, got his 90 per cent, on the dollar in currency, and got the margin from the gentlemen who established the bank. That bank, in the late crisis, was one of the first to suspend ; but resumed again shortly, and is going on as before. It has a banking house which cost over feo.ooo. Gen. John A. Logan was once a zealous Greenbacker — which is nothing to his discredit, as many of the ablest men of which the Republican party can boast were Greenbackers. On January 19, 1874, Logan made one of his roaring speeches lyS OUR MONEY WARS. in Congress against the resumption of specie payment, and making gold a monetary standard. He said " Tlie Green- back is the true standard of value, and gold is merely an article of commerce." Must Trade It Out Over the Counter.— Secretary Boutwell testified in the Senate, January 22, 1874, that when $121,000,000 coin accumulated in the Bank of England to the credit of the United States, — from bond sales, — the bank notified our Treasury Department that its whole power would be used to prevent our taking it in that shape. " So," says Boutwell, " we were compelled to take other bonds." The same game was played with the $15,000,000 of the Geneva award. J. G. Drew said in 1874, " We now find that we have parted with about one billion dollars of our National bonds to Europe, exhausting ourselves of currency even to do our daily marketing, to make up the pile ; and that it is there in Europe ; for which, as by the foregoing testimony of Prof. Price and Secretary Boutwell, we can get no specie ; but any amount of dry-goods and knick-knacks." Pulling Down the American Flag. — It was by such touching appeals as this from poor old Poppy Dix, that Grant was induced to re-rivet the chains upon this people. State of New York, Executive Chamber, Albany, March 30, 1874. My Dear Sir, — I am very much concerned on account of the action of Congress on the currency question ; and I can- not forbear to express to you my earnest hope that you will, by the interposition of your veto, prevent the disastrous con- sequences which must result from any further increase of the paper circulation. Money can now be borrowed in the city of New York, on the best security, at four and five per cent, interest. I believe I speak within bounds when I say that one-half of the paper .currency of the country is absorbed in stock and real estate speculations. Every addition to it must run into the same channels, and only serve to multiply and aggravate prevail- ing evils. The action of the Senate, sustaining the action of the House of Representatives, has already degraded legal- tender notes below the standard of specie from one to two per cent, more tlian before. And if the maximum of four hun- dred millions proposed by Congress is reached by further OUR AIONEY WARS. 179 issues, I am confident the measure will bring on, within the next two years, a revulsion, which will be fatal to your ad- ministration, and ruinous to the interests of the country, if not to the public credit. John A. Dix. The old " War Governor " was thusly doing his best to " pull down the American fiag." But nobody " shot liim on the spot." Victorious Grant Conquered. — Congress, warned by the Panic, passed, early in April, a bill authorizing the reissue of the $44,000,000 Greenbacks, which had been retired ; and fixing the amount of the Greenbacks at $400,000,000. This bill was denounced by the money power, as an " inflation" measure (see Dix Letter) ; and accordingly was vetoed by President Grant, April 22, 1874. The story of the way in which Grant first Snubbed and then yielded to the bankers in 1874, is very instructive. It is told by J. G. Drew, in " Our Money Muss." Frightened into temporary decency by tlie panic of September, 1873, Grant, in his December message made an elaborate Greenback and convertible bond argument, with the following points : ist. A clear avowal that specie basis can only be " reached and main- tained " by securing the foreign balance of trade in our favor. 2d. That said balance of trade can only accrue by sufficient currency. 3d. That such sufficient currency does not exist, even for the dullest part of the year. 4th. That much more currency is required in the fall and winter months. 5th. That some automatic system is required to prevent the amount which would be proper for Ihe active season from glutting the market in the dull period. 6th. That Government should loan the amount of the face value of bonds to banks at four per cent, per year, payable at the option of the borrower. 7th. Tliat our " currency, based on the credit of the nation, is the best that has ever been devised,'' and comparing it with gold itself. Congress, in April, 1874, prepared and passed a pretty good bill in accord with these views. Then the telegraph flashed through the land that \^'all Street was up in arms. There was a meeting of the bankers, etc., calling upon Grant for a veto. Peter Cooper presided. This was probably the last time that the bullionists got the old man to play figure-head for them. He presently came out as a Greenbacker, After that iSo OUR MONEY WARS. the " best people " called him " a superannuated old fool." At first Grant snubbed the usurers. He remembered how they had clamored about him for an issue of $30,000,- 000 Greenbacks, to tide over the panic of the preceding September ; and now, they and tlieir organs — such as Harpers' Weekly and the Herald were ridiculing and lam- pooning the very ideas promulgated by them the previous autumn. Meetings of the oligarchists were promptly called, and proposed action is thus reported to the World: " It is pro- posed to co-operate with movements already on foot in other States, in forming leagues throughout the country, — first to unite the people in demanding that our Government shall redeem every pledge it has given regarding its financial prom- ises ; and second, to make clear to the people that a fixed standard of value is vital to every department of labor and trade ; that self-interest, equally with common honesty, demand that the promise to re-establish a specie basis for currency shall be kept. This work requires time, patience, labor and money. For the latter we now appeal to all who are in sympathy with us. The most effective speeches and arguments for sound finance will be printed and distributed ; and also a weekly publication, to inform the people fully upon this question. Popular lecturers of high standing and repute are needed to influence public opinion ; and in various other ways the completion of the organization will require funds. This question of finance is the supreme question of the hour ; and we should consider ourselves the political opponents of all public men who are not with us : or who are even undecided upon the matter of public faith ; and resolve to support no such men for any office whatever." Political ostracism from President to poundkeeper ! Grant could not stand the pressure, and backed down, and " took it all back." In his veto message he says that the bill theoretically increases the volume of the currency, and adds : " The theory, in my belief, is a departure from the true principle of finance, national interest, national obliga- tions to creditors, Congressional promises, party pledges — on the part of both political parties — and of personal views and promises made by me in every annual message sent to Congress, and in each inaugural address." The Public Robbers LeT Go. — Private investigation had OUR HONEY WARS. l8l unearthed immense robberies of the Government, — reaching loo millions, — by fraudulent withholding of taxes on tobacco, whisTty, incomes, railroads, banks, insurance companies, legacies and successions, for seven years. The regular offi- cials had not time, money, or proof for this work. So, May 8, 1872, a law was passed — by aid of the Secretary of the Treasury — which authorized those having the proof, to go ahead, and push the robbers for half what they could collect. These parties had risked their lives and spent much money in the search. In a few months after the passage of the law, they collected $500,000; and would probably have collected 50 millions, within two years, without suit. But the money was coming from rich men, — capitalists, corporations, politi- cians and bondholders, — some of whom had overruling polit- ical influence. Congress was besieged to repeal the law, that the collections might be stopped, and both were done in June, 1874 (Statutes, pp. 18,192). The pretense was that the officers of the Government ought to make the collections, without cost to the Government ; when Congress kn6w that most of the claims had stood without assessment or collection, for years, and that the Government could not have realized them by ordinary methods of collection. None of the frauds detected and punished by Sec. Bristow would have been com- mitted, but for the repealing of this law. National Bank-note Redemption. — The Act of June 20, 1874, provides that National banks need not retain money in their vaults to redeem their circulation ; though they were required to keep money for their deposits. They were bound to keep five- per cent, in money in the Treasury, in legal tenders, to redeem their notes, which sum amounted to about %\1 000,000. This law also provided that when banks did not wish to go into liquidation, but did wish to sell their bonds at a large premium, they could by depositing legal-tender notes in the Treasury to the amount of their circulation, lift their bonds and sell them. This was the means of locking up in the Treasury a large amount of legal-tender money, held by the Treasury to redeem National bank-notes ; which the Treasurer could do or not as the Secretary saw proper. This arrangement kept the bank notes out and the legal- tender notes in. This law also enabled the stockholders of banks to sell their bonds (the most of which cost ^40 and %^o i82 OUR MONEY WARS. on the $ioo) for $120, and returned them their 10 per cent, of bonds over circulation. After the bonds were lifted and sold, the Government and the people had no security fo'r the National bank-notes but the legal-tender notes to the same amount. We would infer from this that the legal tenders were better than the bonds, in the estimation of Congress. Why not bank upon legal tenders, therefore, instead of bonds ? The Value of Convertible Currency. — That noted financier, Wm. H. Winder, said, July, 1874, in the N. Y. News, which he used as his organ .(paying for the printing of his articles) : — The reader will bear in mind that, for the pur- pose of rendering suspension of specie payments an impos- sibility, and to make steadiness assured, so that no tempta- tion to undue expansion could be indulged in, the law known as the " Peel " Act was passed, in England, in 1844 ; by which the Bank was prohibited from issuing any more notes, except upon the actual previous deposit of one dollar in gold for "every dollar of paper which should be thereafter issued. And, in order to render this provision effectual, the gold thus deposited was held, not by the Bank, but by an officer who held it for the sole and only purpose of redeeming notes issued by the Bank. All this was in the creditor country of the world. England had claims on her debtor countries, over and above all she owed, of more than $3,000,000,000 ; a sum five times over all the gold in all the banks of the world : besides which, the Peel Act required the deposit of a dollar of gold for every dollar of paper thereafter issued. Yet, with supreme advantages in every respect, necessary to make a convertible currency permanent, assured, steady, free from fluctuations, and a safeguard against industrial and commercial disasters, read what the Parliamentary Committee say of a convertible currency, after the Panic of 1847 : " It is true that to those who may have expected that the 7 and 8 Vict., cap. 32 (Peel's Act requiring the Bank to keep specie to redeem her bills), would effectually prevent recur- rence of cycles of commercial excitement and depression, the contrast between the years 1845 and 1847 ™ust produce grievous disappointment. " To those who anticipated that the act would put a check on improvident speculation, the disappointment cannot be OUR MONEY WARS. 183 less, if reliance is to be placed (as its committee are confident it may) on the statement of the governor of the Bank and of other witnesses, that speculations were never carried to such enormous extent as in 1846 and the beginning of 1847. " If the act were relied on as a security against violent fluctuations in the value of money, the fallaciousness of such anticipation is conclusively proved by the fact that while the difference between the highest and lowest rates of discount was, in the calamitous years of 1837 ^"z^2/»(? amused itself thus : " No cautious gentleman can retire to rest with any comfort now-a-days, without going through a rigid course of self- examination, to convince himself that he has not been steal- ing something, or committing a forgery or so, during the day. 2i6 OUR MONEY WARS. As a prophylactic measure, — during this epidemic of financial inpropriety, — it would be well for any operator who is com- pelled to expose himself, to hire a private detective to watch him — at least during business hours." I wrote at the time : " As true as it is funny and sad ! Try it yourself, Jay ! " Again that paper said : — Time was when exposure of such frauds as those of Morton in Philadelphia, and Oilman in New York, would have shaken the commercial fabric to its very foundations. It is not altogether a favorable symptom, that these dis- closures create so little alarm. For it proves that commercial confidence has sunk so far, that scarcely any dishonesty in men of the highest standing, and scarcely any carelessness on the part of those who manage the funds of others, can depress it much further. The Norristown, Pa., HeraldsdciA : " To save composition, every well-regulated newspaper office should keep the fol- lowing form in type : The savings bank of sus- pended yesterday morning. The president Mr. , who is a defaulter to a large amount, has disappeared, and it is believed that he has sailed for Europe." These " conservative " papers were largely responsible for all this villainy. No More Trade Dollars. — October. 15, 1877, John Sherman ordered the Philadelphia Mint to stop coining trade dollars. Silver had so depreciated that speculators were making money, shoving them on the people. Our Per-Capita Currency. — The following table, com- piled from official sources, by B. S. Heath, shows, the amount of our circulation per capita; and its contraction from 1865 to 1877 : Year. Currency. 1865 $1,651,282,373 i866 1,803,702,726 1867 1,330,414,677 1868 817,199,773 1869 750,025,989 1870 740,039,179 1871 734,244,774 1872 736,349,912 Population. Per Cap. 34,819,531 47.42 35,537,148 50.76 36,269,502 36.68 37,046,949 22.08 37,779,800 19.85 38,558,371 17.19 39,750,073 18.47 40,978,607 17.97 O UR MONE Y WARS. 2 1 7 Year. Currency. Population. Per Cap. 1873 738,291,749 42,245,110 17.48 1874 • 779,031,589 43.55°>756 17-84 187s 778,176,250 44,890,705 17.33 1876 735,358,832 46,284,344 15.89 1877 696,443,394 47,714,829 14.60 N. A. Dunning, in " The Philosophy of Price," gives a similar table, with the amount of currency decreased by from 30 million in 1868 to go million in 1877, through some discrepancy in their calculations. Dunning continues thus : Year. Currency. Population. Per Cap. 1878 $549,540,187 48,935,306 11.23 1879 534,424,248 5°,iSS>783 10-65 1880 528,524,267 51,660,456 10.23 1881 610,632,433 53,210,269 11.48 1882 657,404,084 54,806,577 11.97 1883 648,205,895 56,450,714 11.48 1884 591,476,978 58,144,235 10.17 1885 533,405,001 59,888,562 8.90 Debts in the United States. — The Act of Feb 12, 1873, took from silver its " lawful money " quality in sums above $5, and the law of May, 1876, totally demonetized the trade dollar, — leaving nothing iDut gold with which to pay debts, taxes, interest, and for the redemption of bank bills. The following figures do not overreach the actual amount of the individual, municipal, corporate and national indebtedness of the country in 1877 : Greenbacks to the amount of $350,000,000 National bank currency 300,000,000 Notes payable in bank 900,000,000 National bank deposits 1,000,000,000 Savings bank deposits 1,500,000,000 Mortgages, not less than 3,000,000,000 Railroad bonds 5,000,000,000 Public debt 1,700,000,000 Private indebtedness 200,000,000 Municipal bonds r 375,000,000 $14,325, °oo,°o° It is no wonder that, with statements like this before them, our people hustled to get silver remonetized. 2i8 ,OUJi MONEY WARS. The English View our Amazing Folly. — After review- ing the state of trade in Great Britain and Germany, the London Telegraph says, with reference to the United States : ■ — In 1876 thirty American railways, covering 3,846 miles in length, and representing $217,848,000 of invested capital, were sold under foreclosure of mortgages. Receivers in bank- rupty were appointed or foreclosures determined upon in the case of 46 other lines, extending over 7,576 miles and in- volving total expenditure in construction and maintenance of $536,000,000. Ten railway companies figure in the list of defaulters for the same year, whose aggregate lines measure 2,757 miles, and show $156,661,000 to have been invested in them. This making a total of 86 railways, consisting of 14,179 mileage, and exhibiting a loss to the shareholders of $912,509,000. The list, therefore, as far as it has been made up, discloses the painful fact that, during the past year, one- fifth of the entire railway mileage of the United States, — representing a similar proportion of the total railway capital of the country, — was brought, from various causes, into a state of insolvency. But this melancholy revelation naturally awakens our curiosity to learn how far the business classes proper shared in the general financial visitation. Out of 630,099 firms in the Union reported to be engaged in business in 1876, no fewer than 9,002 became bankrupt: and the gross amount of their liabilities reached the sum of $191,117,786. The increase in the number of failures com- pared with 1875 was 1,350; while the latter year showed the number to be 2,000 more than in 1874. The total indebt- edness of insolvents in 1876, however, notwithstanding the augmented number of failures, was less than in 1875, by nearly $10,000,000. But the description of firms which col- lapsed last year, combined with the reduced average liabili- ties chargeable upon the previous year, plainly indicates that the wave of financial embarrassment is not yet spent ; and that, after engulfing the mammoth houses, it has Ijeen grad- ually swallowing up the smaller traders. It is, moreover, significant of the manner in which business has been con- ducted in the several divisions of the Union, that the failures in the Middle States are one in every 57 trading firms, and in the Western States one in every 72. In the Eastern States, notwithstanding their reputation for wealth and stability, one in every 59 firms has succumbed ; while in the Southern OUR MONEY WARS. 219 States which have been depopulated and exhausted by the civil war, and are still laboring under heavy political disabil- ities, the percentage of failure is one in every 64. 1878. A Year of National Shame. — Under this head the N. Y. Herald descanted as follows early in 1878 : — The year that has just closed is altogether the most disgraceful in American annals ; if disgrace is to be, measured by the ex- posure rather than by the perpetration of stupendous breaches of trust. If the year 1877 has any competitor for this bad pre-eminence it is the year 187 1, when the monstrous rob- beries of the Tweed Ring were dragged forth into publicity ; and the rascalities of the infamous Credit Mobilier were fastened by proofs upon their authors and accomplices. — But in those instances the villainy was not so widely diffused. There was one great focus of corruption at Washington ; but the taint and rottenness had not spread into every walk of business, and every kind of private and semi-public transac- tion. But at present, the whole atmosphere seems reeking with foulness. Every description of fraud and embezzle- ment is repeated, in every part of the country ; until their accumulated magnitude seems like Pelion piled upon Ossa, in the ancient fiction. It is difficult to say whether frauds have attained a ranker growth here in New York, or in Phil- adelphia, or in Boston, or in Chicago, or in San Francisco, or in some of the smaller towns. In proportion to- popula- tion and opportunities there would seem to be but little dif- ference. — There is no conceivable variety of swindling which has not been practiced ; but the most execrable of all is the widespread violation of sacred trusts, by institutions and men charged with the care of property belonging to the unpro- tected and the helpless. There are degrees in the turpitude of theft ; and none is so base as that which takes the bread from the mouth of the widow and the orphan, as so many false guardians and rotten savings-banks and life insuraace companies have done. The Partial "Uprising of a Great People." — 1877 was the hopelessly horrible year. Light began to dawn in the Spring of 1878. The trodden worm began to turn, to some purpose. Then began " the uprising of a great people." The agony was as great as ever, and the misery more appall- 220 OUR MONEY WARS. ing. 800,000 of our Eastern middle-class, in despair of any improvement, realized what they could on their small stores, factories, shops and farms ; and fled west of the Mis- sissippi, — knowing that if they delayed longer they would soon be going a-foot. The " pound-of-flesh " men were frightened ; and yielded a few points, such as the Congress resolution of January 20, 1878, asserting the right to pay bonds in silver, the Bland Act of February 28, i878,remonetiz- ing silver, the Act of March 31, 1878, reissuing 44 million of Greenbacks ; and the decree of John Sherman in October, 1878, remonetizing the Greenback by making it receivable for custom duties. These made some prosperity possible. Of the people who fled West, say a quarter made a new start by living in dug-outs on the prairies ; a quarter perished from disease and privation and heart-break ; a quarter took wage service ; and a quarter wandered back East to finish their lives in various servitudes. Bonds Not Payable in Gold. — The following resolution was adopted by the Senate January 25, 1878, and by the House January 28, 1878 : the vote being in the Senate 42 to 20, and in the House 189 to 79 : — "That all bonds of the United States issued or authorized to be issued under the said acts of Congress hereinbefore recited are payable, prin- cipal and interest, at the option of the Government of the United States, in silver dollars of the coinage of the United States, containing 412^ grains each of standard silver ; and that to restore to its coinage such silver coins as a legal tender in payment of said bonds, principal and interest, is not in violation of the public faith, nor in derogation of the rights of the public creditor." The acts referred to are the Funding Act of 1870, authoriz- ing the issue of 4's and 4}^ 's for refunding purposes ; and the Resumption Act of 1875, authorizing the further issue of the same bonds for resumption purposes. The resolution was a public notice to the whole world, that the nation would pay its debt in silver, if it should so elect. With the exception of ^200,000,000 of 4j^'s and $75,000,000 of 4's every United States bond outstanding in 1886, was issued subsequent to the passage of this resolution, and was subject to its declara- tion. Of the excepted bonds, the $200,000,000 of 4j^'s became due in 1891. In spite of the above facts Chas E. Coon, late Asst Sec. OUR MONEY WARS. 221 of the Treasury, was urging in the Herald in i886, that " we have agreed to redeem these bonds in gold coin. " Coon is one of those coons who start a still hunt for a fat Wall Street berth, as soon as they get into office in Washington. His Wall St. concern — Bateman, and Co., came to grief in 1890 : also a concern in Buffalo in which he was silent partner. The Bland Bill Passed over Hayes's Veto. — The Act of February 28, 1878, monetized the silver dollar over the veto of the President. Silver dollars of 4I2t^ grains 9-10 line, are made full legal-tender for everything, unless specially provided to be paid in something else. These dollars are to be coined by and for the Government; not more than $4,000,000 per month, nor less than $2,000,000. The holders of these dollars can deposit them in the Treasury, and receive certificates therefor, which certificates are to be full legal- tender for everything. This is the celebrated " Bland Bill ", that has caused the silver dollar to be called the Bland dollar, the Bland cart-wheel, etc. Senator Teller said in his speech of May 14, 1890 : — During the ten years preceding December 31, 1877, we produced in the United States not less than $425,000,000 of gold ; and of silver not less than $270,000,000 ; or a total of gold and silver of $695,000,000. Yet, in the month of February, 1878, when the Bland bill became a law, our total amount of gold and silver, exclusive of subsidiary coin, was less than $180,000,000, of which $167,500,000, was gold. During the ten years named, we had exported $335,000,000 more gold than we had imported ; and $185,000,000 more silver than we had imported ; making $520,000,000 of gold and silver in excess of imports. During the ten years succeeding the passage of the Bland bill, we imported $198,634,763 of gold in excess of our exports ; and we kept at home our own production, amounting to more than $420,000,000. So that, in ten years, we added to our stock of gold more than $5oo,ooo,ooo, less what might have been used in the arts ; and our stock of gold is now estimated by the Treasury Department to be $684,- 000,000. We have now of gold and silver $1,038,000,000. Surely the coinage of silver did not drive gold out of the country ; nor did it keep it out. February 22, 1878., the Greenback Labor Party, meet- 222 OUR MONEY WARS. ing in convention at Toledo, Ohio, formulated an elaborate platform ; the money planks of which have been much used by money reformers since then. March 31, 1878, Congress authorized the reissue of the 44 millions of Greenbacks that had been destroyed. Discussion was hot and heavy in 1878 as to whether the U. S. currency was near two billions in 1865. The, Inter- Ocean, that now stoutly denies it, in 1878 printed the following editorial reference to this subject : — The anti-Greenback papers of this city are in the habit of stating, every now and then, that the volume of currency has been but slightly decreased, and that the amount per capita in 1865 and 1878 varied very little, being from $14 to $15. We produce below a table compiled from official sources : Year. Paper Money Population Per Capita 1865 1866 1872 1877 $1,651,282,373 1,803,702,726 735,358,832 696,443,394 34,819,581 35.537,148 46,284,344 47,714,829 $47 42 5076 1589 14 60 The currency included in the above amounts comprises demand and one and two year Treasury notes authorized by the Acts of December 27, 1857, December 17, i860, and March 2, 1861 ; temporary ten-day loans and one year certifi- cates of indebtedness ; Treasury notes payable in two years and in sixty days ; 7-30 three-year notes ; compound interest notes ; three per cent, certificates ; non-interest bearing demand and legal-tender notes ; fractional currency ; State bank notes and National bank notes. The bulk of these issues were made legal tender by the Government. We are prepared to prove that all the above issues were employed as currency, and went to make up the volume of circulating medium. It is in our opinion the highest of folly for the opponents of the so-called National party to deny facts so well established as is that of the contraction of the currency. If that party OUR MONEY WARS. 223 cannot be defeated by a fair and honest statement of the truth, then it had better be allowed to win. Ernest Seyd on Silver Demonetization. — On May 18, 1878, Judge W. D. Kelley referred in the House to a previous speech of his which was : " I avail myself of the two minutes allowed me to reply to the gentleman from Maine, Mr. Frye, and the gentleman from New York, Mr. Hewitt, and to tell them why prices have fallen in every country, why machinery is idle and the laboring people of all countries in poverty, and unable to consume each other's productions, or to con- tribute to the revenues of their Government. Prices, sir, the world over, had adjusted themselves to the volume of gold, silver and paper money in circulation ; and when Ger- many and the United States thrust silver, which was about one-half of the metallic money of the world, out of the cate- gory of the money metals ; when Geftnany prohibited the cir- culation of any bank-note under $2j.oo ; when the United States contracted its paper money from two thousand millions to practically less than five hundred millions,— they decreed the terrible shrinking of prices, and consequent ruin, which have taken place throughout America and Europe, and thus deprived the laboring people of the world of employment, and of the ability to earn the means to contribute to the public revenue." He then said that the contractionists and monometalists sitting near had told him that this two-minute speech was " the best joke of his life." To intensify this joke, he would now present to them a paper read April 5, 1878, before the British Society of Arts by Ernest Seyd, F.R.S., one of the most distinguished statisticians in the world. It related to the stagnation of business in England. Mr. Kelley said that though Mr. Seyd did not consider the effect of the con- traction of paper money in America and Germany, it was evident that "all the evils accruing from silver demonetiza- tion were immensely enhanced by our withdrawal of more than a thousand million dollars of paper money." Mr. Seyd, after a full exposition of the wealth and finan- cial affairs of England, showed that in J873, our panic year, which followed three years of wonderful success in England, the balance of trade turned against her. In 1875, 6 and 7, it rose successively to ;^4,ooo,ooo, ;^34,ooo,ooo and ^^57,- 000,000 against her. He says, truly enough, that in 1873, 224 OUR MONEY WARS. Central and South American States began to default on their bonds. This reached, in 1875, ^50,000,000. In 18,76, Peru and Uruguay bankrupted, with a loss of $150,000,000 to England ; and Turkey with a loss of $400,000,000 ! ! The strangest omission in Mr. Seyd's estimates is that of the de- fault on the interest on $500,000,000 of American railway and other securities in" our panic years. This certainly had much to do with England's depression. Perhaps, he did not enumerate this because he considered that only the interest was permanently in default. He was about right; as most of them had recovered by 1882 ; though the stockholders of most of the companies held in the grip of these bonds, had been ruined. The latter-day bond has a tighter hold than the ancient ones ; especially when the strongest nations are ready to re-rivet them by aid of army and navy ; as the Egyp- tians have discovered of late. Ah, where are the angels to enter the prison-house and cast off these bonds, as they did for Apostle Peter ? PouRTEEN Dollars Per Capita. — The circulation out- standing June 18, 1878, is shown as follows, by Secretary McCulloch's report : State Bank circulation 426,504 National" " 324,514,284 Demand Notes 62,297 Legal-Tender " 346,681,016 One and Two Years Notes of 1863. . . . 90,485 Compound Interest " .... 274,920 Fractional Currency 16,547,768 >S97'274 The same statement estimates the population of the United States at 47,483,000 or 48 million in round numbers. This gives a per capita circulation of $14, or $30 less than in 1864, 1865. A Million a^d a Half Greenback Vote. — The most remarkable occurrence in 1878 was the extraordinary growth of the Greenback-Labor party ; which in November polled a million four hundred thousand votes ; and elected 20 Con- gressmen ; about 15 of whom remained faithful to the party. One of the prominent features of this movement was what was called "Peter Cooper's Advocate" ; though the paper was only under the auspices of Cooper. It attained a cir OUR MONEY WARS. 225 culation of 700,000 real subscribers ; and sent out 30 tons of paper weekly. The writer of this, Samuel Leavitt, was managing editor during the six months, March to Septem- ber, when it was "booming". It afterward went down, through mismanagement of the proprietor, Walter Shupe, as rapidly as it rose. I gave a column and a half to the N. Y. Sun about the paper when I left it in September. Here is what the N. Y. Times said of it : — In short, the Greenback organization in the South, as in other parts of the country, is, in different localities, made up of different material. In North Carolina, the men engaged in the new movement are for the most part, white mechanics, and small white farmers who are in debt — men who have nothing to lose by inflation, repudiation and communism ; and who believe that they can gain nothing by the success'of either of the old parties. There can be no doubt that the people of the mountains and the small farmers referred to have to a great extent been won over to the new party by the teachings of the Aihvcate ; which, at Peter Cooper's expense it is claimed, has been sent into the remote inland counties by the car-load. At all events they are in it ; and the Dem- ocrats are evidently very much afraid that they will remain firm in their determination to vote for its candidates. The Greenback Remonetized. — Much has been said of the quiet, secretive way in wliich Sherman & Co. demonetized silver in 1873. On October i, 1878, in consequence of the Greenback uproar, voiced specially by Peter Cooper's Advo- cate, he, as boss of the Republican and ruling party, caused a change of even greater importance, in that sly, sleek, quiet, unobtrusive way of his. He, on that day, as autocrat of his party, ordered the Greenbacks to be taken for duties AT the Custom House. In this act, sneakingly done, tlie Republican party completely changed front, financially; and ■made the specie resumption of January i, 1879, ^ Greenback REMONETizATiON. The Democratic leaders were too ignorant of finance to see the change of the Republican Party's policy, from a specie resumption to a Greenback remonetization. The National banks had accomplished this result, to save them from bankruptcy, and to extend their charters for 20 years longer. The Republican leaders claimed that it was a resumption of specie payments. It was simply a change of the common Greenback into a legal tender Demand note, IS 226 00 R MONEY WARS. tjhich was always receivable for duties. The Republican leaders soon discovered that the Greenbacks became better than coin ; after they were received for duties. They secretly resolved to support the Greenback system, in order to pre- serve the National banks, to restore trade and save the party. These results were obtained. The slow-brained Democrats were cajoled by Belmont, Hewitt, Tilden & Co. into rank gold-buggery. Chicago Tribune on the Fraud of 1873. — There has been much discussion about the fraud, by which silver was secretly demonetized here in 1873. The Chicago Tribune threw some light on it in 1878. It said that the bill was con- cocted by " an English gentleman," Mr. Boutwell the Comp- troller of the Currency, and two or three other American cap- italists. The work of stealing it through Congress was in- trusted to Mr. Hooper of Massachusetts, in the House, " who is a capitalist and money-lender ; " and to John Sherman in the Senate. It was not permitted to be read in the House ; and Mr. Hooper deliberately lied, in debate upon it, in re- sponse to the inquiry of members regarding its features ; and Speaker Blaine, by extraordinary ruling, helped to force it through the House — only 123 members being present. Mr. Blaine undoubtedly was in the secret of the whole scheme himself. His unheard-of ruling warrants this belief. There was much hot fighting all over the country at this time, as to whether the currency had been reduced, the gold- bugs insisting that it had not been. Such leading papers as Chicago ywAr-Of^a/?, Cincinnati E7iquirer and St. Louis Repub- lican talked as Xh^ Inter- Ocean does in the following sentence. After claiming that we had about 1,804 millions of currency in 1866 [see that year] it adds: "We are prepared to prove that all the above issues were employed as currency." The Leading Paper Caught Napping. The N. Y. Tribune probably put the following in cold type in 1878, be- cause English of Indianapolis was a Democrat. It is too keen in these days, to print so much truth about usury : — • Anyone who has lived in the West during the past five or six years can readily judge what effect English's hard cash and mortgage record will have upon the voters of his section. No class of men have made themselves so obnoxious as the Western money-sharks [except the Eastern, — S. L.]. In the OUR MONEY WARS. 227 years succeeding the war, thousands of men who, by industry and economy, had succeeded in laying up a few hundred dol- lars, emigrated to the West and purchased a farm, or em- barked in business. Most of them, trusting to their past success, gave mortgages on their property, paying -from 15 to 30 per cent, interest. Had times continued prosperous they would have been able, undoubtedly, to meet obligations. But as soon as the business depression began, they found themselves at the mercy of their creditors ; who exacted the last dollar from the poor debtor. The creditor had foreseen just the financial crisis which occurred. Money at once be- came scarce and real estate a drug in the market. With their long purses, they knew they were able to carry the property until the advent of better times. So, the moment there was any default in paying an installment, or even the interest, the sheriff was at the door. The practice became known in the West as " squeezing ". The wrong lay not in the creditor asking his just due, but in his taking advantage of the debtor's embarrassment, to gain a legal title to property worth many times the mortgage, and it is adding insult to injury when one of this class asks for the suffrages of farmers and small traders, from whom he has " squeezed " every dollar possible. The Tribune , which was one of the chief causes of our " seven years of famine in a land of plenty," printed this in 1878, just before " resumption " : — While the laborer, whose wages were reduced, — or the capitalist, large or small, whose money was invested in manufactures or stocks which depre- ciated in value, — has suffered severely, there is a very numerous class who have become much richer by the changes in values. Men whose capital was invested in mortgages, for example, receive the same secure, and in most cases, undiminished income ; while the actual cost of living for them has fallen 33 per cent, since 1876. The Clearing-house of New York passed a resolution in 1878, when the Sub-Treasury was admitted to the Clearing- house, forbidding the use of silver certificates in settlement of Clearing-house balances. The National Banks, in 1878, were bragging about their having paid 86 million dollars in taxes in 14 years. They said nothing about having drawn 350 millions of interest, In that time. 2 28 OUR MONEY WARS. The New York Tribune said early in 1879 : — A part of the nation's net earnings, in 1878, was applied to the extin- guishment of foreign debt — perhaps ^300,000,000. Another part was secured by the Treasury, in preparation for resump- tion — about $94,000,000. But, if the estimate of Mr. David A. Wells is correct — that the nation accumulates wealth, in excess of all its expenditures, at the rate of about $500,000,- 000 yearly, — over $100,000,000 of idle capital must have been stored up during the year 1878 ; and an amount nearly or quite as large in 1877, awaiting a restoration of confidence and prosperity. Failures. — The following table of failures is taken from Hunt's Merchants' Magazine for the years from 1862 to 1870; the rest from other sources ; up to 1871 they are only for Northern States. Year. Failures. Liabilities. 1862 1,652 % 23,049,000 1863 495 7,899,000 1864 520 8,579,000 1865 530 17,625,0.00 1866 632 47,333,000 1867 2,386 86,218,000 1868 2,197 S7.27S.°oo 1869 2,411 65,246,000 1870 3,160 79,697,000 1871 2,915 85,252,000 1872 4,069 121,056,000 1873 S,i8i 228,490,000 1874 5,830 159,239,000 1875 7,740 201,060,353 1876 9,002 191,117,786 1877 8,872 ... ... 190,669,930 1878 10,478 234,363,132 1879 6,658 98,149,053 1880 4,735 65,752,000 1881 5,582 81,155,932 1882 6,738 102,000,000 1883 9,184 172,874,172 1884 10,968 226,343,427 1885 11,211 267,340,264 Mark how few the failures during what the gold-bugs call OUR MONEY WARS. 229 " inflation times " ; how they climbed toward the panic year, 1873 ; and how heavily they bore during our " return to honest money ! " And how steadily they climbed again in the ensuing honest money epoch. One Soweth — Another Reapeth. — That worst of all our famine years, 1878, produced the following harvest of interest, according to New York Iribune of January, 1879 : — Some surprise has been expressed at the fact that, while many millions of the four per cents, have been taken by permanent investors, who are not holders of called sixes, the purchases of railroad bonds, and the safest investment stocks, have also been very large. During last week, the recorded sales of railway bonds, in the Stock Exchange, amounted to about ^6,000,000, and during the previous week, to nearly $5,000,000. It is presumed that the unrecorded sales were much larger. But it should be remembered that the amount disbursed in interest and dividends has been very large. Besides the January interest on the public debt, — about $22,- 000,000, — the interest on bonds of solvent railroads amounts to about $47,000,000 each half year, the greater part of which is payable in January. The half-yearly dividends on paying railroad stock amounts to at least $35,000,000. The interest on municipal, county and State bonds, which still pay promptly, must exceed $25,000,000 each half year. The dividends on National bank stocks, are $14,000,000 half- yearly. And the dividends on manufacturing stocks, even in the present depressed condition of industries, must ex' ceed $40,000,000 half-yearly. Of about $161,000,000 thus disbursed in interest and dividends for the half-year, — ex- clusive of interest on the public debt, — certainly more than half is paid in January ; so that the sum disbursed in Janu- ary, to be reinvested, or applied to the personal expenses of investors, must be over $100,000,000. As long as United States bonds, and other first-class securities are offered at low rates and in large amounts, a large proportion of the sums disbursed will naturally seek such investments ; the more because such securities may be expected to advance in price, before the return of full prosperity in commerce and manufactures invites enlargement of the capital therein employed. 1879. A Resolute Start. — The following resolutions of the 230 OUR MOJ^EY WARS. New York Associated Banks took effect January i, 1879 — the day of Resumption: — " i. To decline to receive gold coins as ' special deposits ' ; but accept and treat them only as " lawful money " ! 2. To abolish special exchanges of gold checks at the Clearing-house. 3. To pay and receive bal- ances between banks at Clearing-house in either gold or the United States legal-tender notes. 4. To receive silver dol- lars upon deposit only under special contract to withdraw the same in kind. 5. To prohibit payments of balances at Clearing-house in silver certificates or in silver dollars, ex- cepting as subsidiary coin in small sums (say under $10). 6. To discontinue gold special accounts, by notice to dealers to terminate them on January i." Thus in every way they " headed off " gold payments and the use of silver. The New York Times, in 1878, had concluded an article on resumption with the following — which is very noticeable from such a paper: — The simple fact is the Associated Banks of New York propose to use their power to exclude the silver dollar from commerce, in defiance of the laws and the will of the people. They must naturally expect stubborn and persistent opposition ; and such opposition will not be carried beyond the bounds of reason, if it shall compel the banks to share in the work of resumption. A Devouring Demon in PniLADELPHiA.^Judge Kelley, summing up his speech in Congress on Resumption, February 14, 1879, gives this as the state of things in Philadelphia, in January of that year : " Thus it is shown, Mr. Speaker, that by the erection of 22,111 new buildings ; by the improvement and extension of 7,045 other buildings ; by the opening of more than 54 miles of new streets, and the curbing, paving and laying sidewalks of 99 miles of street, by the laying of 92^ miles of gas-mains, and the erection of 2519 public lamps; by the addition of nearly 131 miles of water-mains, and the construction of nearly 57 miles of main sewers, and the in- crease by about 70 per cent, of the foreign commerce of the city, the value of Philadelphia has been reduced $lj, 000,000. Consequently, they who have accomplished this work have not delved and wrought and builded for themselves. No, sir, ruin has pursued, as an avenging demon, enterprise wherever it has engaged in productive business. He only OUR MONEY WARS. 231 has profited by their toil wlro has wrapped Iiis talent in S napkin of untaxed government bonds, and brought it forth for use only when the products of labor, energy and enter- prise were to be sacrificed at sheriff's or other forced sales. " But, sir, the sheriff's sale was not the only joyous event with which the stricken people of Philadelphia were made to welcome the great fact of equivalency between our paper money and gold. For on the first day of the ' glad New Year,'' the owners of 13,582 properties, within the limits of the city, on opening their morning papers, were pleasantly greeted by name, by the receiver of taxes, with notice that their taxes for 1878 were in default : and that unless they were paid on or before the 15th of the month, preliminary steps would be taken to secure their collection. Living in enforced idleness, as thousands of the most industrious and thrifty of them are, think you that this was a grateful New Year's greeting ? " He shows, then, that immediately after resumption, the following appeared in the organ of the Philadelphia sheriff, the Record : " Slieriff Wright, on January 6, will begin the largest sale of real estate ever held by any sheriff in this city. There are 692 writs, covering about 1,000 properties. The sale on the first day will begin at 4 o'clock, in the new court-house, and extend from No. 370 on the list to No. 692." About that time in 1879, the Philadelphia Times called a halt, in " paying large salaries and erecting costly public buildings, while the money to pay for them can only be got by the seizure of citizens' property at the hands of the sheriff." Well might Philadelphians ask, with Solon Chase of Maine, " Who gets the hay ? " This, mind you, was in thrifty Philadelphia, the fountain- head of co-operative building societies — the city of homes — the city where people own their homes. More or less. England a Thousand Millions Out. — Judge Kelley, on April 17, 1879, quoted Ernest Seyd, " the ablest statistician in England," as saying that demonetizing of silver by Ger- many had cost England a thousand million dollars of her capital, in three years ; and that she was losing in a larger 232 OUR MONEY WARS. ratio in 1879. " Her factories and mines are closed. Such is her immense wealth, that her land is in parks and game- preserves for the sport of the aristocracy and the gentry. She looks to us and other nations for most of her food. As for Germany, after her great victory over the French, her con- dition is worse than that of England." California Cleansed. — 1879 saw a purifying cyclone sweep over California, the results of which were a new and better constitution ; the driving of the gamblers of the stock exchange from San Francisco to New York, and the fall of seats in their stock exchange from $35,000 to $5,000. They swarmed in New York in the Boreel Building ; but did not succeed, as expected, in teaching all our servant-girls and longshoremen to gamble in stocks, California fashion. Gold Big-Bug Papers. ^ About this time the N. Y. Graphic, a silver paper, said : — The New York press does represent the " syndicate " and the large monay-lenders more than any other class of the community. It is believed, and stated, without contradiction so far, tliat the N. Y. Wo7-ld is under the control of August Belmont, and the Philadelphia members of the syndicate. It is they who are the money- backers of the paper ; and it is understood that it is their interests, both in politics and business, which are represented by the course of that journal. The N. Y. Times is supposed to be inspired by ex-governor Morgan, afso a member of the syndicate. Then the other influences back of the Times are the very rich men who have direct relations with Wall Street, and the leading money in- terests there. The Tribune, it is popularly supposed, is partially, if not wholly, owned by Jay Gould. His interests are those of a " bear ". By insisting upon the gold unit of value, prices are depressed, and the millionaires have common interests the world over ; being the representatives of the creditor class, who naturally wish their money to have the largest possible purchasing power. The Herald is owned by a very rich man, James Gordon Bennett ; supposed to be worth some six million of dollars, and, of course, his interests are with the creditor class. "Y\i% Journal of Commerce and the Bulletin are peculiarly sub- ject to Wall Street influences, especially those of the great creditors. OUR MONEY WARS. 233 The Smi has lately given some signs of repentance of its golden heresy. Of course the creditor interests are powerful in the Even- ing Post office, although, we judge, the attempt to pay in gold debts contracted in paper money, in the purchase of real estate, has proven a very serious business for the chief pro- prietor of that paper. [Poet Bryant.] Augustus Schell, whose relations to the syndicate are well- known, is a large stockholder in the .Express newspaper ; which accounts for the milk in that cocoanut. It will be thus seen that, without any actual bribery, the New York press, because of its proprietorship, is on the side of the gold big-bugs, instead of the people. It represents a class that has money out at interest ; and wish to get the largest possible return for their investments. We do not say that any editor, publisher or proprietor of any of the New York papers is purchased with money ; but, naturally, these organs represent the people who own them, and their in- terests are very different from those of the great mass of the American people. And now, in December, 1891, a further evidence of the stuff there is in the editors of the '•' leading papers " is found in this concerning that infamous creature W. H. Hurlbert, now hid- ing from arrest (for perjury and wronging a woman), in Mexico. This passage is from his old paper, the N. Y. Jf^or/d: — At about that time Hurlbert was taken on T/ie World by Manton Marble, the editor, as a writer of edito- rials. Later, when Tom Scott bought The World to use it for business purposes, Hurlbert was made editor. He was retained in the editorial chair by Mr. Jay Gould, when the paper passed into Gould's hands. With the advent of the present proprietor of The World Hurlbert's services were dispensed with. The Interest Equals the Public Debt. — The interest paid on the public debt, from i860 to 1879, amounted to $1,916,577,099.35 — an amount greater than that of the entire debt in 1864; just before the close of the war. Such facts should be branded into the American mind ; and set there " as with lead in the rock forever." The Congressional Silver Commission estimated the total 234 OUR MONEY WARS. indebtedness of our people in 1879 at tliirteen billions — about the same as in 1877. This was one-half the total wealth of the country. What Gold the Banks Had. — Judge Warwick Martin wrote in 1880 : — Some bogus statesmen, when it suits their purposes, insist that nothing but gold and silver coin is capital. The National banks have existed 16 years. It might be interest- ing to learn from the reports of the Comptroller of the Cur- rency, how much gold and silver coin these banks have had, as capital, for the last 16 years. * * From 1864 to 1869 these banks had no coin capital. From 1869 to 1879, the average was $26,000,000; nearly allot which was held in the city of New York. Sometimes these banks have held more, but often less than this average. * * According to the bullion definition, for ten years these banks had an average of three per cent, capital. At another time not one per cent. Now [1880.] they have $109,000,000 to secure over $1,204,000,000 liabilities. They have aggregated coin capital very slowly ; though in the last 16 years these banks have received from the Treasury over $300,000,000 in gold : which they sold at a premium. Bonds Sold After January i, 1879. — Martin said : — The four per cent, bonds sold after this date were not purchased because resumption had taken place. They were purchased because business was still in a prostrate condition, and was purposely so kept, the same as before so-called resumption, so that bonds might be sold. It would not do to permit business to revive until these bonds were sold. The busi- ness of the country had to be kept down, so that there would be no investments of money in anything but these bonds. Business, therefore, remained prostrate for more than six months after professed resumption. There was, up to the last of July, 1879, scarcely a ripple upon the business waters. The purchase of bonds for legal-tender notes, was about the only business being transacted. No other could be permit- ted, or the bonds could not be sold. On April 18, the bonds were all contracted for, but they were not paid for until months after the sales. To permit business to revive and the money of the country to be employed therein, before this money for the bonds sold was collected, would have caused the failure of the banks and bankers composing the syn- OUR MONEY WARS. 235 dicate, to whom the bonds had been sold. Time had to be given these banks and bankers to make sales of these bonds in England and in the United States, or they could make no money out of their purchases, and might be ruined. This was done at the expense of the business of the country. The people had to suffer. The syndicate had to be and were protected. So soon as the bonds were all paid for, the money in the banks and in the Treasury, which had been so long locked up, was released. Resumption was not attempted until legal-tender notes were made equal to coin. This is admitted by Mr. Sherman. If these notes had not been made equal to coin by being; received for duties, no resumption, so-called, could have taken place. The whole $346,000,000 legal-tender notes would have gone to the Treasury for redemption, as the law contemplated. There being in the Treasury for redemption purposes only $133,000,000 coin, a failure of the Govern- ment would have taken place. Gold Rushes from Europe. — After the money lords let up on us, in 1879 (as they promised they would, if^ we paid " the pound of flesh "), and gave us prosperity, — gold rushed hither from Europe. We had been too poor to get into debt to her latterly ; and she had shoved the bonds back on us, when they rose to a high figure. So when her poor crops forced her to use our food products, she had to shell out gold for them. The N. Y. World said, December 1879 : — All Europe said, six months ago, that by the end of the present year, the balance of trade in our favor in merchandise transac- tions, would become a balance against us. But Europe is changing its mind. The Bank of France alone, since June i, last, has lost over 54 millions of dollars in gold ; which has come to New York; and the drain still continues,. to-day, as severe as ever. On August i, 1879, the Bank of England had more than 35 millions of pounds sterling of coin and bullion. On November 26, 1879, it had but 28 millions. The coin and bullion stock in tbe Bank of Germany fell between Sep- tember I and October 15, 1879, by at least three millions of pounds sterling. According to the best attainable information, the stock of gold and silver in the principal European banks, in October last, was about 1,000 millions of dollars ; of which about 400 millions were in silver. 236 OUR MONEY WARS. < ■? \n s H eS n to t f/i > w H < Jj'j H - Q 2 S I td " H-9 ;> 3 w o O Ph « e, P< o W 13 f^ 3 u 'jCsuoui SB jusjxa XuE 0} SmiB[no -lUSAOf) papnnj -iin JO pu^ sajou -^TlBg JO ^Biox (^J M M M M W ( 1 -i-OO >-■ -^ O t^ O O ■*>0 00 ceo u-i t^ M ^ r O 0^0 00 rooo c-» t^ c^ c^ t^ r^ c^ t>.o \0 \o 'eggi 'ji Airijf •cggi 'Sc -qsji 'iggi Vi Xjnf JO spv) s3;ou japuax F^^T -j-Bsq issja^ni uo]y[ p CT> 0^ O' O^ O I On^Onm ■jEaX ipES 'i jt[nf 'S310U isajajm pnnodiuo^ • - ■•; -CT^mMW •sajou jEsX 1 oi'-Z . . ; : : . I . M M HI vo 00 'J- '^ :.'!!! 1 .' t : UEaX qDEa 'I Xjnf -(^98^ '£ipiBi^[jO30v) ;;! 1 ;.■;:;: Jn ^ '^ "^ "^ t :*. r : :'."'' ' sAnp 09 iiT piiE M 'SiX c m aiqEXtd 'sajou iCtnsESJX UEsX qoES 'i Xjnf ■ssanpajqsp -iq JO saiEDypjaD JESX-I pUE 'SUEO{ XEp-oi XjEJOdiuax •I Xpif 3iii -pnBisino (ZSgi '■Lz 'oad ptiE oggi 'Zi -33(1 8"" ::::;;:;:::::;: : 'iggi 'zi qDJEjM JO spy) s3}ou XjnsEsax -"^^^ ^^ pUE I piiE puEinaQ t 1 . per M{ in lited S for 26 year s & iM 00 CO CO CO CO 00 CO M 00 00 CO 00 00 00 00 00 M 00 CO 00 00 OO 00 00 00 OUR MONEY WARS. 237 CHAPTER XV. 1880 to 1885. THE TRIUMPH OF THE PLUTOCRATS. 1880. President Hayes, in a message in 1880, congratu- lates the country upon tlie successful resumption of specie. Judge Martin shows, at length, how and why it has not been successful,— has been, indeed, a farce carried out contrary to law. An article in the Political Science Quarterly, in 1890, makes the statement that in 1879-80, one-half of all the mortgages in Indiana were forclosed. Who Held the Bonds. — A radical paper said in 1880 : — They used to sing us such sweet songs about the value of United States bonds as a boon to the savings-banks ; and to the money people, all over the country who wanted a safe investment for their little savings. Doubtless there was con- siderable truth in the song; but there is much less truth now. The following chunk of solid facts lets daylight upon the whole matter ; and we commend it to the serious atten- tion of our readers : The Sunday Herald claims to have information as to the largest holders of United States bonds. The list of these millionaires, in this country and Europe, is as follows : Mr. Vanderbilt, 37 millions ; Mrs. A. T. Stewart, 30 millions ; Jay Gould 13 millions registered and a large amount of cou- pon bonds ; an estate in Boston, and three or four persons in New York have 10 millions each ; the estate of Moses Taylor five millions ; D. O. Mills, four millions. These,— with an unmarried lady in New York, name not given [probably Catherine Wolfe], who has eight millions, — are the largest holders in the United States. In Europe the Rothschilds, together, hold the evidences of nearly one-quarter of the bonded debt. They have nearly 400 millions. In England 238 OUR MONEY WARS. the Baroness Burdett -Coutts Bartlett has 20 millions ; the Duke of Sutherland five millions, and Sir Thomas Brassey five millions. — Boston Journal. Currency of Fifteen Nations. — B. S. Heath, gives the following, in 1880 : — Nearly all civilized nations recognize the sovereign right of Government to make its Treasury notes legal tender. In the following table, ^& follow the figures of the Director of the Mint; adding thereto the statement of the amounts of paper money which is legal-tender in the countries named : Countries. Gold. Silver Full Tender. Total Paper. Paper Legal Tender. United States. Great Britain.. Sweden Norway Denmark.. . ... France Austria Italy Russia Spain Peru Brazil Canada Japan Turkey 618, IS. 10, 20, 733. 43. 17. 108, 130. 7 50497 619,043 000,000 ,000,000 ,000,000 ,400,000 ,200,000 ,000,000 ,000,000 ,000,000 62,000 $45,206,200 366,700,000 27,360,000 40,000,000 1,819,900 6, 30. ,291,385 000,000 10,000,000 $683,943,799 209,148,875 11,680,000 10,300,000 18,900,000 466,755,000 322,938,854 3 1 5,000,000 587,907,562 33'79S.ooo 13,900,000 91,000,000 29,047,742 143,000 100,000,000 $346,601,000 200,000,000 11,680,000 10,300,000 18,900,000 128,993,411 305,000,000 360,000,000 *40,ooo,ooo 13,900,000 91,000,000 10,674,850 "100,000,000 100,000,000 The following shows how we were frightening Europe about her gold in 1880 : — Paris, September 10. The subject which engrosses public attention here, and throughout the continent, is the enormous exportation of gold to America. Notwithstanding the efforts made to arrest its outflow from Germany, by raising the rate of discount, and the limited payment of gold to certain centers of disbursement,the ex- portation is assuming alarming proportions. The steamer that left Hamburg on the 4th inst. took out 3,000,000 marks ; the steamer of the 9th took out nearly 3,000,000 more ; and Saturday's Hamburg steamer which calls at Havre, will probably take out between 4,000,000 and 5,000,000 marks. * As given. OUR MONEY WARS. 339 At two Paris banking-houses there are large shippers of gold ; and it was stated to-day that they will have shipped this weejc 3,000,000 francs each. The magnifjcejoLt cotton crops iii_Ameri£a^- this aeasaii,_mlL_n"ftIdaubt,--iRfljieace--tbe exchange against France for tlie next three months. ^Jreenbacks and National Bank Notes Compared. — Judge Martin made elaborate comparisons between Green- backs and National bank notes-in 1880. Here are some of his points : i. Since the first issue of National bank notes, the laws have made the legal-tender notes perform for the National banks all the offices which coin did for the two old banks of the United States, and for the State banks. 2. Legal-tender notes were, during the bank suspension in the Fall of 1873, in the city of New York, worth one per cent., and even one and a half per cent., over the notes of National banks. They were needed to make up the reserves of the banks, which National bank notes could not do. 3. The legal-tender notes of the United States are now worth one per cent, premium over newly-coined American gold, in all the commercial cities of Great Britain, and on the continent. They are more convenient than coin ; and preferred by travelers. They are current everywhere. 4. These legal- tender notes are worth more than gold in the large cities of the United States — owing to convenience and safety. This cannot be said of the notes of the National banks. 5. In Canada, legal-tender notes are worth two per cent, premium over gold. On the Pacific coast, they are worth from one to two per cent. Why cannot the people be supplied with this money, when they desire it so much ">. The annual meeting of the National Land, Labor and Cur- rency League of Canada, for 1880, was held at Guelph, Canada, Mr. Wm. Wallace, TiL P., President, in the chair. Their demands were precisely like those of the Greenbackers of the United States. The Bonded Debts of all Nations. — It is given by Faw- cett in his " Gold and Debt " at 32 billion dollars; taking the increase of the United States bonded indebtedness since the publication of that book, it was, in 1880, about 33 billions. The holders of these bonds against the civilized nations absorb from the product of labor an annual income of $ i,- 700,000,000; mostly payable in gold. They, to a very large 240 OUR MONEY JVASS. extent, control the precious metals used as money, and the mines that yield them ; and are very generally, in all the commercial centers, advocates of a single gold standard or specie basis money. To Pay the Bonds at Once. — The following from the N. Y. Times, of October, 1880, gives the bullionist aspect of a very interesting piece of financial history. Of course, every one knows that the genuine Greenbacker, — who de- spises all metal money — sometimes advocates silver, " not because he loves silver more but gold less ; " and knows that the more we push silver to the front, the sooner we will be rid of all metal money, except as a commodity. The Ivnes said : — On April 5 of this year, Mr. Weaver of Iowa, at pres- ent the Greenback candidate for the Presidency, got a vote on certain resolutions brought in by him at the beginning of the session. He had been put off, from week to week, by the Speaker, Mr. Randall, of Pennsylvania, who knew very well that if his party in the House were let to vote on Mr. Weaver's resolutions they would vote wrong. The result showed that this fear of Mr. Randall's was wholly just. The resolutions declared— that there should be no further re- funding ; but that the Unit ed States bonds__should_^S4jaid o_ff_asquickly asjjTey__could.jDeJ~and tothis end the Mints sIioulH~Be eniproyed, to their full capacity,' in coining -st-arrd- ard silver-dollars. In the 30-minutes debate which went be- fore the vote, General Garfield made a strong speech against the resolutions. Mr. Kelley of Pennsylvania and Mr. Wea- ver spoke for them. Not a voice was raised on the Demo- cratic side against them, ^^'hen the vote was taken it was found that 73 Democrats, and only 2 Republicans, with 10 Greenbackers, were in favor of them ; 88 Republicans with only 29 Democrats [Eastern] were opposed to them. Pretty Good Picking. — Here is the logical results to the stockholders of the National banks, as shown by the retiring president, \'\'m. H. English, of the First National Bank of Indianapolis : — As an evidence of how the banks have been able to get along, in spite of the "ruinous taxation ", we append an extract from the report of INIr. Wm. H. English, upon retiring a few weeks ago from the presidency of his bank, which he says has run 14 years : " In. the jneantime if has voluntarily returned $4,^00,000 of capital hack to its stockholders ; besides paying them in dividends $i,jq6,2J0, part of which was OUR MONEY WARS. 241 in gold. And I now turn it over to you with a capital tmim- paired and $j2/,ooo of tindiiidcd earnings on hand. To this may be fairly added premium of United States bonds on hand — at present prices amounting to $j6,000 ; besides quite a large amount for lost and destroyed bills. " May I not safely leave these grand results as a perma- nent testimonial of the fidelity and careful and judicious man- agement of my administration ? " According to this statement, the profits of this bank for the fourteen years it has been in existence were Two millions and fifty-nine thousand, two hundred and fifty dollars. The capital stock of the bank is now half a million. We venture to assert that no legitimate business in Indiana has paid such profits, during the same period, as this bank : or, for that matter, as any well managed National bank. The banks have been carried forward upon the prosperous tides of privilege and subsidy ; and to these they would now add immunity from taxation. This they are likely to secure ; for they are almost all-powerful with Congress. But, woe to the Congressman who serves them in this last scheme of ex- tortion ! A day of reckoning comes. — Terre Haute Express. Compound Interest. — Occasionally a strong proof of the consuming power of interest reminds one of the impression made upon Napoleon by the study of a compound-interest table. He said : " There is one thing, to my mind, more wonderful than all the rest : viz., that the deadly fact buried in those tables has not before this devoured the whole race." Here is a specimen : On Oct. 6, 1854, Geo. T. Walker of Santa Clara, Cal., gave Wm. Hood a note secured by a mort- gage, for $1,850, for six months ; interest at three per cent, a month, to be compounded if not paid at the end of each month. Mr. Walker went to Mexico before the note came due ; and when he returned, in or about 1880, his creditors sued him and got judgment for $9,000,000. Tilden was nominated in 1880, on a Wall Street platform. The Democrats had not done this since 1828, except in 1877. Gould Becomes Respectable. — About 1880, Jay Gould, who began his large operations, by stealing nine million dollars from the Erie RR. (which he refunded in preference to going to jail, and covered back into his pocket, by the rising of Erie), 16 2 42 OUR MONEY WARS. forced himself into the " highest financial circles." We then, at length, find such men as Moses Taylor, Robt. Lenox Kennedy, J. P. IVIorgan and Saml. Sloane associated with him, as Western Union directors — not to mention Schell, Sage, Cornell, Dillon, Field and liuntington, who were as- sociated with him in various enterprises. The fountain of gambling in the United States is Wall Street, fs it honest gambling, or dishonest? Is the game " straight " or " crooked " ? Mr. Henry Clews in a recent work maintains that it is "straight ". " I recollect the time," he says, " when men in the higher walks of life would have been ashamed to be seen in Wall Street. Now men in the same sphere are proud of the dis- tinction, both socially and financially." Another Straw in 1890. — Sumner, of Yale, lately came down from his high-horse, and lectured to the boys about the good and bad gambles of Wall Street. But he is too prosy and antiquated, and now they have a fresh young man right from the spot — F. W. Hopkins, Yale, '80. " Mr. Hopkins is with the brokerage firm of S. V. White & Co., of New York ; and has chosen for his subject a course on ' Investment Securities.' The different forms of securities will be de- scribed and distinguished from one another, with illustrations • — and the advantages and disadvantages of each for invest- ment will be explained. " With the exception of a few general remarks on the sub- ject in the political economy classes, this topic has been rigidly suppressed; and never before has the open discussion of Wall Street methods been allowed in the classic precincts of old Yale." The Tonnage of the Lake Ports. — One great cry of the gold-bugs is that we need a coin basis, because our foreign trade, as Garfield falsely stated, is " transacted in coin." If this were true it wbuld not offer a weighty reason in view of such facts as this given by Alex. Mitchell's son-in-law, at the Banker-s' Convention of 1880: — The tonnage annually entered and cleared in the Milwaukee Custom House district is larger than that in either Boston, Philadelphia or Balti- more. The commerce of the ports of Lake Michigan, judged Toy the tonnage of vessels entered and cleared, is almost as large as the whole of the foreign commerce of New York OUR MONEY WARS. 243 City. The commerce of the lake ports is as large as the wliole foreign commerce of the United States. A Bright Idea — \\'hose ? — Dr. E. P. Miller keeps a hy- gienic institute in New York City. He is an indefatigable worker and writer for what he considers true currency re- form, but has not as yet (1880) been converted to the " fiat " idea. He had much influence over Peter Cooper, but has been generally at loggerheads with the leading brains of the Greenbackers. He is credited with the following, which seems a truthful view of the main obstacle to paying off the bonds that existed in the darkest times — 1873 to 1880 ; and one not suggested, as far as I know, by any one else. Having usually disagreed with Dr. J\Iiller, I gladly credit him with this idea : — Now, the charges made against these papers in that issue were these : That by advocating the issue of Greenbacks enough to pay off the bonds, they were knowingly or ignorantly working in the interest of the bondholders. They are doing so in this way: It would be necessary, to nearly treble the volume of money to pay off the bonds, and the effect of trebling the volume of money would evidently be trebling the value of property. To have the Government issue 1,800 millions of Greenbacks, and put them into the hands of the bondholders, when property is depreciated in value as much as it is now, would enable them to invest that money in real estate, which, in less than four years, would be worth more than 5,000 millions of dollars, and would estab- lish one of the worst landed monopolies in the world. \\'e chal- lenge any one to refute this argument. The true policy would be, if more Greenbacks are to be issued, let them be used to start public improvements ; to em- ploy our idle workingmen ; to promote the industries of the country ; and let the people who now hold the property have the benefit of the rise. If the money is issued, people em- ployed, business restored and the country made prosperous, the payment of the bonds will be a matter that will not be difficult to accomplish or burdensome. Immediately after writing the above, I found an extract from Dr. Miller's paper, giving an interview with George Francis Train, during the hard times, which looks as if the bright idea came from that erratic seer. If Train was then demented, we need a few more of the same style of dement. 244 OUR MONEY WARS. He said-: — Some Greenbackers begin to see that success this fall would have been a terrible defeat. To give bondholders, who have been twice paid already, Greenbacks for their bonds, would be equal to making them a present of all the mortgaged property in the land. Shylock, with a couple of thousand millions in hand, could foreclose the whole nation-, and two hundred thousand Alabama bondholders and Na- tional Bank shareholders would own 48 millions of slaves. The Ohio Idea. — The N. Y. Tribwie said, after elec- tion in 1880: — "The defeat of Ewing will finally dispose of the Ohio Idea. Only the tail-end of it is alive in this canvass. After a year of successful resumption, with gold pouring into the country at the rate of two tons a day, the irredeemable currency notion will speedily expire. The Ohio Democracy will be reorganized on the basis of State Rights, and a hard- money currency supplemented by redeemable Green-backs." Ewing has, indeed, given up the fight, and is trying to " make money " in New York. But the Ohio Idea, at this writing — 1890 — is a very lively corpse. In 1880, when Gen. Weaver was running for the Presi- dency, there was a lively fight in Maine, which is thus spoken of in the N. Y. World in September, 1892, by a man named Frank A. Barr, a neighbor of Blaine : — McKinley's political career was practically borri in that old homestead when Blaine brought him to Augusta in 1880, when the big- gest fight of his life was on hand. Twice during that battle, when Blaine was beaten by the Greenback craze, and an ordinary man by the name of Gen. Plaistedwas elected Gov- ernor, Mr. Blaine took McKinley under his arm and spoke from the same stump with him. It was practically his start in national life. During that battle there'were scenes which have never been repeated in American politics. Every cross- roads was picketed with workers, and every schoolhouse was filled with a speaker. A dozen times during the combat, which threatened the destruction of Garfield's chances for the Presidency, there were more than 150 meetings a day in the State of JNIaine. Those were the years when the primest powers of the Re- publican party were centered in that September election, and Mr. Blaine dominated every feature of it, bringing to his side not only money without stint, but men of the highest distinction, many of whom have passed to the great unknown, OUR MONEY WARS. 245 but whose lives are a part of the mighty history of this Re- public. Did I say pathos ? Yes. For not long ago the great Sec- retary of State, when speaking of the wonderful events which gather like shadows and sunshine over his life, said in one of those moods which indicate fatigue : " Politics is a Vanity Fair, of which I have been only a part." [All of which shows that Blaine was a politician rather than a statesman, and a politician on the wrong side. That dis- gust with his work never comes to the patriot who feels that he is fighting for the right. — S. L.] 1881. The Carlisle Refunding Bill. — January 19, 1881, the Carlisle Refunding Bill, refunding the 202 million six per cents and 470 million five per cents, at three per cent., passed the House. Efforts were made to put the rate of interest back to three and a half per cent., and to strike out the pro- hibition against receiving other bonds as security for circu- lation ; but they did not succeed. With one or two trifling amendments, the Senate on February 18, approved the bill and returned it to the House. The banks pretended to believe that they would have to change the bonds at once, and tried to get up a panic. In a week they gathered 14 million dollars ; and sent it to Washington to deposit — against their bonds. The Stock Exchange collapsed ; many stocks falling rap- idly. Secretary Sherman tried, in vain, to stop tl\e panic ; but nothing but the knowledge that they would ruin them- selves, — as well as cause universal bankruptcy, — stopped the crazy course of the bank officers ; and they quieted down — apparently assured by Hayes that he would protect them. At all events, though the bill finally passed the House on March i, it was promptly vetoed by President Hayes, the next day but one, in a message which took the ground, fairly and squarely, that the measure was detrimental to the banks ; and therefore was disapproved by him. Secretary Windom came into office March 5, and he has been much praised by some for the way he handled the refunding. The banks were chuckling — feeling sure of their five and six per cent, for another year. Windom, who really had not 150 millions in any shape for refunding, played sharp, Acting on the J 246 OUR MONEY WARS. idea that one man with a pistol is a match for ten unarmed ; he announced on April 11 that on July i he would pay the 202 million sixes then maturing; or so much of them as were not, in the mean time, presented for extension at the pleasure of the Government at 3^ per cent. With char- acteristic cowardice the holders rushed for the 3^ exten- sion. In a month all the sixes were sent in and stamped with an agreement binding the Government to nothing, but obliging the holders to accept 3^. The same game was played with the fives ; and by August 12, they too were cov- ered in. These fives and sixes were, in 1882, regularly con- verted into three-per-cent bonds ; payable at the pleasure of the Government ; and bond-holders are anxious for a two- per-cent. bond to run twenty years. The report of the Controller of the Currency, for 1879, shows that the profits of the First National Bank of New York Syndicate was $2,153,959 in distributing $738,000,000 of bonds, Windom distributed the above $672,000,000 for $10,500. On February 26, 1881, the N. Y. World said of the above bank panic : " It is a terrible power which the banks possess of throwing everything into sudden unhingement and con- fusion, when everybody was expecting financial fair weather." The Bankers' Rebellion. — Congressman E. H. Gillette, of Iowa spoke of the " Bankers' Rebellion " thus in 1882 : — This bill went into the Senate, and as soon as it got there we found that the stand we had taken had disturbed proud Senators ^ little ; for they began to write letters to the Green- backers, asking for copies of their speeches ; and the result was they did not try to modify the bill materially ; but passed it substantially as it came to them. Then the bankers were furious and said they would rebel. They began to carry out their threat ; and in a few hours contracted the currency 18 millions, and produced a panic which reduced values in New York City alone 100 millions of dollars. They came down to Washington, — whole train-loads of them, — filled our halls and lobbies, and blackened the air with their threats. The Republican leaders said they would filibuster to prevent the Senate amendments being considered in the House ; and we had to sit there for a day and a half and vote on motions to adjourn. I don't want any of you to understand the Green- backers voted for that bill ; we always voted against the billj OUR MONEY WARS. 247 and against any issue of bonds ; but did all .we could to modify the bill. [Applause.] These bankers also went up to the President (Hayes) and threatened revolution. They said, " W'e have destroyed 100 millions of values already in New York; and we propose to withdraw 200 millions if necessary; and we will produce a panic such as was never heard of." What did your President do under those circumstances? What did he do? Did he call out the troops ? Did he say, " '\^'e will see whether this rebellion will be triumphant or not ? " Oh, no ! We have had a great many rebellions in this country. There was one in Rhode Island, one in Massachusetts, and another in Pennsylvania, ^^'e have put them down. \A'hen a half million of men sprang to arms in the South, to over- throw thisrepublic, a million men in the North, thank God, rose up to put that rebellion down. And then came a little rebellion in Pennsylvania. A few men at Pittsburg broke into cars and stole some provisions for their starving families ; and in the riots that followed two millions of property were destroyed. But it was nothing but a poor man's rebellion ; and we sent troops to put it down. But when the bankers rebelled in 1881, and destroyed 100 millions of values, what did the President do ? Did he call out the troops to suppress that rebellion' Oh, no; he said "Don't! don't! we will surrender ! " And without a struggle, without a blow, with- out one drop of blood,'your country's flag was hauled down in the mud ; and )'ou were surrendered into the hands of the bankers, — more dangerous foes than fired on Sumter. In 1881, Californians, — having gotten a little over their speculative fever, and seeing how they had kept population out and business down by fighting paper money, and nickels, etc., are in a more reasonable frame of mind generally. Gold was becoming a burden in Boston in 1881. The Clearing-house committee of the banks held a meeting, and voted to recommend making the Boston Safe Deposit Vaults, on Milk Street, the depository for gold coin, used in settling balances between banks : Clearing-house certificates being used. Gould Must be Sustained. — August 20, 1881, when the stringency of the morning, at six per cent,, changed to twQ 248 OUR MONEY WARS. and three pei cent, in the afternoon ; it was charged that the dubious Mercantile Trust Co. was offering ten millions at three per cent; and there was much head-shaking at the statement that the money came from the " Equita,ble Life " to help Jay Gould. Senator Jones saw a Great Light. — In an interview in the Cincinnati Enquirer, on November 11, 1881, Senator J. P. Jones of Nevada, so noted as having become a Greenbacker, though interested in silver mines, said : — I came to the Senate a victim or a convert to the writings of the old financial au- thorities, like Adam Smith, Amasa Walker and Stuart Mill. It was after that that I became illuminated by a study of the actual facts of exchange, panic and currency. I saw prop- erty reared by the work of men's hands, — towns, farms, mines, mills, railroads, all shrink to be next to worthless : while this medium of exchange, gold and silver, began to mount up and up in value. Whatever made life interesting was without a market, and that which had no use whatever, ex- cept to be hoarded and handled by Jews, was the master of the times. I said to myself there is injustice in this. We want a money that shall not leave the country, as soon as we get into a tight place. On another occasion, Senator Jones said : — Gold had been set up as the sole instrument of valuation, but the masses of this country, who were accustomed to doing their own think- ing, and did not rely for that purpose on the creditor classes, either of the United States or England, had made up their minds that, instead of being an instrument of valuation, gold was an instrument of confiscation and of spoliation. The people of the United States could not prevent the creditor classes of England from robbing and despoiling the Canadian, the Australian, the Egyptian, the Hindoo, and the Turk, but it surpassed his comprehension why an American Congress in 1873, or at any other time, should assist the English creditor classes — and, for that matter, the American creditor classes, also — to rob and despoil the debtors among our own people. The single gold standard men attempted to brush aside the equities involved by sneering at the debtors. Who were the debtors ia this country.'' They were the aspiring, the hopeful, the energetic, the audacious — they were the up- builders, the designers, the men of initiative, of executive power, and of achievement. They were the constructive OUR MONEY WARS. 249 force in every community. As probably nine-tenths of the business of America depended in one form or another on credit, any system whicli made the dollars of a debt more valuable at the date of payment than at the date of borrow- ing was a system of robbery. Machiavelli, describing a cer- tain period in the history of Italy, had said of it, the " people perished, but the brigands throve." In October Folger took charge of the Treasury ; and, Gar- field having been shot, Arthur reigned in his stead. There is fanaticism among silver as well as gold men. An out- break of it is seen, at this time, in the absurd proposition of Californians to Arthur and Folger, to replace one, two and three bank and Treasury notes by silver: Silver Certificates Preferred to Gold. — Senator Teller, in his Congress speech of May 14, i8go, said that "On September 18, 1881, the Secretary of the Treasury gave notice that he would receive gold for silver certificates. For some reason, I do not know what, he revoked that promise November i, 1881. And during that time $80,000,000 of silver certificates were exchanged for gold." One explana- tion of this the Senator would have found, if he searched the record, viz., Windom was Secretary in September, Folger in October. Windom then had more of the courage of his con- victions than he showed in 1890. Keene on Gould. — It was apparently about this time, that James R. Keene, the California speculator, talked in this way about his ups and downs : — According to Gould's fables, I lost some four millions in wheat ; while, in fact, I lost only a million and a quarter : half of which loss I re- covered, at one stroke, in a speculation in lard ; and more than the other half in stocks. Did it ever occur to you why Gould seeks the malarious banks of the Hudson ? No.? Well, he cannot stand the pure, bracing air of the seaside : it is too healthy for his constitution. He lives on malaria, and other people's misfortunes. If the Government were to put him in a Florida marsh he would absorb every taint of miasma in it, so that not even an alligator would be left. The St. Louis Republican — had an article on November 8, 1 88 1, that treats of the successful attempt of the banks to defeat the three per cent, refunding bill. It continues thus : — President Arthur takes a more just and patriotic ,250 OUR MONEY WARS. view of the subject. Instead of approving tlie conduct of the banks, he exhibits alarm at it, and recommends that Congress take measures to prevent a repetition of it in the future, by prohibiting the National banks to recall their notes, wiihout giving due notice of their intention to do so in advance. Secretary Folger speaks still more emphatically. He says : " Should many of the banks through apprehension of adverse legislation, or from any other cause, desire to retire their circulation, the deposit of such amount with the Treasurer might cause a serious and sudden contraction of the currency, and grave embarrassments in business. That the apprehension of such action is not groundless, is shown by what took place on the passage of the refunding bill by Congress at the last session." He, therefore, favors a law prohibiting the banks to call in their notes, except on giving due notice : and in a period fixed by statute. There are so many good reasons for the legislation recommended, — and the need of it is so apparent, — that we may take it for granted the present Congress will promptly provide for it. Not only is such legislation needed, to protect the country from bank intermeddling with public affairs ; but it is needed, also, as a rebuke to the amazing executive folly, which took sides with the banks and against the country, in the refunding bill of last season. An Elastic Currency. — An article in the International Review for October, 1881, quotes the testimony of U. S. Treasurer Gilfillan against the idea that the National banks furnish an elastic currency. It says : '' Within his observa- tion, the National banks do not retire any of their circulation when currency is redundant, or increase their issues when there is a stringency. A bank which would retire $90,000 of its circulation when funds are in excess, would receive $100,- 000 ; say in four per cent, bonds ; which it would immedi- ately sell at $113,000 ; and find itself with $23,000 more than when it endeavored to get rid of its surplus. Should it pre- fer to hold the bonds, without selling, it might as well let them rest in the Treasury, and hold the notes instead, subject to any possible demand. In case of a stringency, likewise, the straightened bank will hesitate before drawing $113,000 from its available cash in order to get $90,000 in its place. The interests of the country and the interests of the banks work inversely, in the expansion and contraction of the bank currency." OUR MONEY WARS. 251 Gold Sticking in the West. — A new trouble, that began now to worry the honest-money gold-bugs, is thus voiced by the N. Y. Tribune: "Accumulation of grain at Chicago and other interior points, necessarily involves the use of increased sums of money ; while the comparative ivimobility [/] of gold which, when once paid out in the producing regions, seem to stick there, most pertinaciously, — almost wholly prevents that return of money to the East which used to appear about Oct. I. If the grain speculation continues, therefore, still larger sums are likely to be absorbed in the interior : while the curtailment of exports will limit our power to draw gold from abroad." Really, now, how sad. Ask Prof. Sumner what to do about it ! The famous " Rigolo " talked thus in Nov. 1881, in the N. Y. Sun : — Inflation and overspeculation seem to be the order of the day all over the globe ; andpeop/e who now pay $J0 a share for stocks like Wabash, St. Louis and San Fran- cisco, or Missouri, Kansas and Texas, — ivhich but two years ago sold at a dollar a share, — can console themselves with the fact that the Union Generate in Paris rose from 125 to 2,350 francs per share. The grain speculation seems also to turn against New York. The " boys " here have oversold the wheat and corn market : and have been squeezed to the ex- tent of two or three cents a bushel. But most of them must have made a pile of money on the upward track; and ought to be able to stand the loss. Wm. H. Vanderbilt Sells his Friends. — Here are two 1881 items from Wall Street and conservative journals, that are very histori cal. The Public said : — We regret to hear from some of Mr. Vanderbilt's nearest and dearest friends, that he has lied again. Accusations of this sort should not be thus lightly and loosely tossed about the Street. It is not right that the character of agreat man, who owns 100 millions should be spotted by unfriendly criticism or indecorous rumor. It is asserted that Mr. Vanderbilt assured his friends that the railroad war was settled ; and proceeded to buy stocks. But if he did, the man certainly had a right to sell both his stocks and his friends, as usual. At any rate, he has not settled any railroad war thus far ; and his friends and 252 OUR MONEY WARS. followers wish that they had been the friends and followers of somebody else. Again , — the New York Banker and Broker vasists that Mr. Vanderbilt is determined, in his own interests, to show that his roads can make dividends on rates which would not pay new roads. He has been convinced that a check in railroad building and subscriptions to construction companies will ruin Mr. Gould ; and next to his desire to maintain his roads as the standard of solidity and regular income, is his desire to break Mr. Gould ; whom he regards as a wrecker and a parasite. Eighty-six National Banks, with an aggregate capital of $9,651,056, and to which $5,233,580 in circulating notes were issued, were organized in 188 1 ; being a greater number than in any year since 1872. Stocks up Two Billions. — 1881 was truly a marvelous year for financial history : in fact the last of our marvelous years ; though others in the '80s have been quite eventful; In it we saw the climax of the reaction from the panic and famine years in the '70's. Two thousand millions were added to the nominal values of stocks, which were afterward unloaded upon the " lambs ". It would be very interesting, could one learn how many of the fortunes of one to five millions, upon which Americans are disporting themselves the world over, — were founded in that year, by the smart Alecks, who un- loaded in time ; and invested in real estate and various indus- tries. The work that went on was thus described by the N. Y. Indicator : — The stock market showed a capacity equal to that of the Mississippi Valley for taking water this year. The fol- lowing graphically describes the situation : Why should not the cliques in Denver and Rio Grand, Missouri Pacific^ Texas Pacific, Western Union et id omne genus, strive hard to sustain the stock market ; as their schemes are yet incom- plete ? They have filled up to overflowing with watered stocks, which are worthless without a market on which to dump their load. The crowd sustaining this class of stuff, — and incidentally the whole market, — are by no means poverty-stricken. They control large amounts of money made in previous ventures of a like kind ; which they freely use in support of their present endeavor to flood the country with bastard securities. It remains to be seen if a credulous public is to be deluded into coming to their relief. OUK MONEY WARS. 253 Severe on- Secretary Folger. — A Philadelphia paper said, in December, 1881 : — Henrj' Carey Baird lectured at Greenback Hall last night, on " Some Thoughts on Political Economy and Social Science." He said that the idea that there was no further need for Greenback organizations was a delusion. He was more than ever convinced of this by reading the report of the new Secretary of the Treasur)-. " Secretary Folger," said the speaker, " has shown himself to be utterly incompetent at the outset. He proposes to stop the coinage of silver, now being turned out at the rate of ^2,000,000 a month ; and also favors the retirement of silver certificates, of which there are 66 million dollars worth afloat. Let him try it : and such a disturbance will be created that he will be driven from his office in 48 hours." J\lr. Baird then proceeded to argue for the necessity for the issuance of more money by the Government. 1882. Jesuitical Nonsense. — Although the financial excitement was milder in 1882, there was much hot discussion. Here is an item from the N. Y. Sim, which is Jesuitical nonsense; inasmuch as it ignores the labor cost of gold and the interest on its intrinsic value, and the larger denominations of notes: " The relative cost, in wear and tear of gold coin, as compared with bank notes, has lately been investigated in England ; and the advantage has been found to be largely with the coin. To manufacture a million of .sovereigns costs Jio.ooo , or about a cent apiece. In fifteen years they lose in weight one-half of one per cent., or about $25,000. This makes their total expense, as currency, for the fifteen years, $35,000. The paper and printing of a million one-pound notes would cost, it is estimated, four cents apiece, or $40,000 at the out- set ; and during fifteen years they would have to be replaced at least three times, or, with active use, six times : thus requir- ing an outlay of $160,000, and perhaps $280,000, for the same period that a million sovereigns would remain in circulation." One piece of Jesuitism in the above is, the ignoring the fact that a ten-thousand-pound bank-note costs no more to print than a one-pound note. Again there is no such expense in printing bills here as in England ; and no such fool way of de- stroying them, and reissuing them when they return to their source, as occurs with Bank of England notes. With such rubbish do the gold-bugs retain their hold upon sinTptetcmsl 254 OUR MONEY WARS. In 1882, the famous Prof. Soetbeer wrote an article upon, The Gold Drainage from Europe to America. — He thought that it would last for some time ; but that no evil result need be apprehended ; " that the American banks will tire of having so much gold ; and that the American people will show their old preference for paper money." Wise man ! F. B. Thurber and his Anti-Monopolists — were largely with us in the fight for Government paper money in the early '80s. Here are some of his utterances upon railroad monopoly when he was fighting Vanderbilt, Depew and Co : — We believe that these encroachments were never contem- plated by our forefathers, who rebelled against unjust tax- ation, and threw the tea into Boston Harbor, upon which it was sought to levy taxes. We believe that the men who abolished primogeniture and entail — in order to ensure the more equal distribution of wealth — would not justify a sys- tem of freebooting under the guise of law, which places the production and commerce of a continent at the mercy of a few men, who recognize no principle of action but personal or corporate aggrandizement. \\ Again : Unless charges for transportation are based upon cost of service, and regulated by law, the railroads are virtually owners of the country. Indeed it is more advantageous to the railroad managers than if they had a proprietary interest in all property ■ for with charges for transportation based upon the principle of " what the traffic will bear," — and the railroad managers sole judges of that question, — they can tax production and commerce at will, without the trouble or re- sponsibility of ownership. — Report of N. Y. Board of Trade. Interest Coming Down. — Matthew Marshall, the con- servative old gent who took the place of the late lively " Rigolo ", in writing the Monday finance articles in the N. Y. Sun, had this in i8go : — As we know, the fives and sixes thus extended at 3^ per cent by Secretary Windom [in 1881] were converted in 1882 into 3 per cent, bonds, payable at the pleasure of the Government. And it is worthy of note that the same bank officers who, in February, 1881, were ready to ruin the business of the countrj', rather than accept at par a 3 per cent, bond, — having five years to run, — abso- lutely sent their clerks August i, 1882, to stand in line at the Post Office, to get in the earliest application for 3 per cent, bonds ; which could be paid off at any time ; and which OUR MONEY WARS. 2SS were, in fact, paid off in part within a year ; and were finally extinguished in less than five years. Knox Knocked Out. — It was in 1882 that the South Bend Era thus exposed J. J. Knox : — General J. B. Weaver's expo- sition of the clause in the National Bank law granting 90 per cent of the current market value of the bonds, alarmed the philanthropic gentlemen engaged in the banking business ; and brought from them an instant denial, supported by the testimony of John J. Knox, Comptroller of the Currency. No sooner was the denial uttered than General Weaver and the Greenbackers confronted the bankers and the Comp- troller with the plain words of the statutes. The law was as distinctly in favor of the Greenbackers' position as the Eng- lish language could make it. This was a point clearly scored forjtbe new party. After being convicted of garbling the law, and attempting to deceive his countrymen, Comptroller Knox is driven to admit that the law does grant to the banks 90 per cent, of the current market value of the bonds, but claims that he and another inferior officer had an informal consultation some years ago ; and decided to place a different construc- tion on the law ; so that banks, at present, can only receive 90 per cent, of the par value of the bonds, in bank notes. Knowing that Comptroller Knox falsified in one instance, — in defence of the banks, — we received his new statement with some doubt ; and at once proceeded to investigate as to the correctness of it. And what do we find ? We find that only a few months ago Comptroller Knox furnished to the Bankers^ Magazine the following statement : Washington, D. C, January i, 1882. — The Treasury holds the following bonds to secure bank circulation : Currency 6's $3,536,000 5 per cents 144,000 4>^ " " 32,117.50° • 4 " " 93>i9°:Oo° 3/^ " " 243.262,500 Total. $372,250,150 Total circulation outstanding cur- rency notes 362,792,292 A moment's use of the pencil demonstrates that 90 per cent of the par value of $372,250,150 of bonds is just $335,- 256 OUR MONEY WARS. 025,135 , whereas, according to the testimony of Comptroller Knox himself, the circulation issued to the banks on these bonds is $362,792,292, or $27,767,157 more than 90 percent, of the par value of the bonds. Convicted of falsehood and deception, — first by the law nder which he holds his office, and now by the logic of his own official statistics, — Comptroller Knox stands before the country as the contemptible lackey of th.^ National banks; while the Greenback party has proven anew the correctness of its position on this point of the financial question. / But all that does not prevent Knox from being president of a New York National bank at this writing, in 189 1 ; and continuing to vent owl-like wisdorn as such. In 1882, Judge Warwick Martin printed his " Financial History of the Democratic Party" — a very strong work; showing that all the first leaders of the party were prac- tically Greenbackers ; and that Belmont, Tilden, Hewitt and English have entirely repudiated Jeffersonian Democ- racy. On July 12, 1882, the Bank Charter Bill was Passed. Section 13 provided that " any officer, clerk or agent of any National banking association who shall wilfully violate the provisions of an Act entitled ' An Act in reference to certifying checks by National banks,' approved March 3, 1869 ; or who shall resort to any device, or receive fictitious obligations, direct or collateral, in order to evade the provi- sions thereof, or who shall certify checks before the amount thereof shall have been regularly entered to the credit of the dealer upon the books of the banking association, — shall be deemed guilty of a misdeameanor," etc. There was a fine of not more than $5,000, or imprisonment not more than five years. The bankers smiled at this ; and simply " accepted " checks instead of certifying them ; and everything was lovely again. Not one of them even went to jail, to say nothing of the $c;,ooo. On that same July 12, 1882, John Sherman worked another of his cunning tricks and deep-laid schemes in getting this seeming innocent proviso passed relative to the deposit of OUR MONEY ]VARS. 2S7 gold coin in the Treasury, and the issue of coin certificates tlierefor. Here is the gem, with comments by P. Prentiss, of Cleveland, O : " Frovidcd, That the Secretary of the Treasury shall sus- pend the issue of such gold certificates whenever the amount of gold coin and gold bullion in the Treasury, reserved for the redeinptio7i of Uriited States Azotes, falls below $100,000,000." Notice carefully the above words in italics, for they are the ones that Sherman says authorizes the Secretary to main- tain, as a reserve for redemption purposes, a minimum amount of $100,000,000 in gold. The act speaks of the " reserve " as though it was a thing already established by law, and there is where the craftiness comes in, for it never was established by law at all. It is solely and entirely a scheme gotten up ' by our gold-bug Secretaries of their own volition, and main- tained by every one of them — the Democrats as well as Re- publicans — to this hour. The law does not authorize or require any reserve of gold, silver or anything else to be established or maintained for $100,000,000 or any other amount. It simply says nothing about it. But it does require him to redeem the Greenbacks in coin and authorized him to sell bonds for coin for that purpose. The words, " reserved for the redemption of United States notes," so interloped into the said Act of July 12, 1882, were cunningly devised and put in for the purpose of making a show of a base and support for their claims of a $100,000,000 gold reserve — as being established by law ; and John Sher- man is now putting it to that use, as intended from the be- ginning. The Secretary institutes the " reserve " on his own motion and order, without authority of law, and the next step of the conspirators is to refer to it in the Act of 1882 as though it had been established by law. And the next and last step is to now refer to the Act of 1882 as " an act author- izing the Secretary to maintain a minimum reserve of $100- 000,000 in gold." How is that for a scheme by honest (?) men for honest (?) money ? But further, he is only authorized to sell bonds for coin, " to the extent necessary," to redeem the greenbacks in coin — for that purpose and no other — to that extent and no further. But the Secretary is using the gold reserve to redeem Treasury notes issued under the Sherman Act of ^890, which 17 258 OUR MONE Y WA RS. Treasury notes the law says he shall redeem in gold or silver coin, at his discretion, and that he shall coin, of the silver bullion purchased under the act, as much as may be neces- sary to redeem the Treasury notes issued under said act. Does the law command him to coin the silver bullion as may be necessary to redeem them and, at the same time, authorize him to sell bonds for gold coin with which to redeem everyone of them ? Certainly not ! But that is just what he is doing or says he will do if necessary. Who wants the bonds .' The national banks, to enable them to issue more of their notes as money, and draw interest on the bonds at the same time. Who wants the gold coin ? De Rothschilds & Co., to put poor, poverty-struck Austria- Hungary on the gold standard, and so make lower prices and lower wages for the producers and higher money for the Shylocks. Then the Secretary must pay out, in the usual course of business, the Greenbacks and notes so redeemed, which must again be redeemed on presentation, and so, round and round, ad infinitum; and the amount of gold coin that could be demanded of the Treasury woiild be unlimited. [France redeems her " coin " obligation in silver or gold, choosing the metal she has most of. — S. L.] Henry Appleton (Honorius) had this in the Irish World in 1882 ; — And then, just think of the big boss food-thieves ; compared with whom, your family grocer is but an innocent babe. According to the official statistics, the corn crop in 1881, was sold four times through speculative purchases; the wheat crop ten times, and the cotton crop 172 times. In cotton the speculative trading amounted to $1,729,000,000, in wheat $600,000,000, and in corn $133,000,000. The state- ment is unblushingly going the rounds in the prominent news and commercial papers, that the price of the necessities of life has been enhanced, on an average, 50 per cent, higher than what a normal profit would warrant. Yes, the world stands amazed when it is stated that 12 men own one-half of Scotland, while a few hundreds own four-fifths of Ireland. But right here in free America, 12 men, to-day, dictate that a poor working man shall pay 20 cents for a pound of meat that would furnish a handsome profit at ten cents ; and are standing despotic guard over the stomachs and backs of fifty million of free men. OUR MONEY WARS. 259 Bank Profits. — Banks usually try to conceal their profits. But in the Saratoga Bankers' Convention of 1882, Mr. A. D. Lynch, of Indian.i, gave a piper on " Banking in the West," cjntaining this: 'The profits of National banking in the middle Western States cannot be said at this time to be ex- travagant, though satisfactory. The time has been, within the last 20 years, when the semi-annual dividends of the banks of the States named have been such as to have satisfied even that voracious old usurer who demaiided the pound of flesh. For the close of the year 1881, the reports of these States spoken of, as shown in tables made by the comptroller of the currency, evince that the dividends to capital were 8j4 per cent; and earnings to capital and surplus were 9 i-io per cent. " This is the average ; while in individual instances we still find the old 8 and 9 per cent, semi-annual dividend ; where the capital has been thrice paid back to the shareholders in dividends in the past 20 years ; all costs and losses properly charged out. This will represent about 700 National banks ; with capital of $175,000,000 and deposits at least $600,000,- 000.'' 1883. Trade Dollars in Siam. — During the Trade-Dollar excitement, this came from Siam : — The King is buy- ing American trade-dollars, at about 90 cents on the dollar, and coining new Siamese ticols. The new coin is very handsome and much sought after by the native traders. These ticols pass current for 60 cents within the kingdom : but at Singapore, Senang and Calcutta they are accepted at a discount of 20 per cent, so that their actual value is not more than 48 cents. It is said at the British Consulate, that one trade-dollar produces two ticols ; so it will be seen that the Siamese Government is doing a profitable business by debasing the coin. The Water axd Gas Gone. — By 1883, the gas and water had gone out of so many American enterprises, that had been unloaded upon the " lambs ", — that our fellow " skins " of Europe began to give us the cold shoulder. Rigolo said, in his Monday article, in the N. Y. Sun : — Business men, returning from Europe, say that the moment an American comes to any broker's or banker's office in London and Paris, — and attempts to talk business,^everybody runs away. They are willing to meet well-introduced and polished 26o OUR MONEY WARS. Americans on social terms, — as tliey are willing to marry handsome American girls, — but they won't have anything to do with any liind of American securities. The " Seney Crowd's" High Kicking. — In 1883 came the high-kicliing of the " Seney Crowd ", which is thus de- scribed in the N» Y. Times : — iro7e> Securities are Piled up and Marketed by Christian Financiers : — The well-known and philanthropic banker, Mr. Seney, is the recognized head of a group of financiers and railroad constructors which \\'all Street has dubbed " The Seney Crowd." TjTe_ crowd, as .a collective .substantive, exists for the purpose of issuing securities. This is the func- tion of its being. It has introduced "the Seney method," of railroad financiering, — the like of which was never seen in Wall Street before, and it is to be hoped, will never again be seen. The reasoning on which the method is based is simple — plenty of securities, and if you make them cheap enough the people will buy; they won't buy 1,000,000 at 50, but give them 50,000,000 at 10 and they will take the lot. Had the " Seney Crowd " acquired the New Orleans line they would first have formed a syndicate among themselves, and bought up the property for cash at the lowest price obtainable. They would then have made some necessary repairs, got some equipments on. car trusts, and made a traffic agree- ment with the road it was intended to work with. Having thus put things into shape, the members of the syndicate would organize themselves into a railroad company, with a high-sounding name ; and proceed to divide the profits. The printing press would go to work with energy. First mortgage bonds, second mortgage bonds, terminal bonds, consolidated bonds, income bonds, preferred stock certificates, and com- mon stock certificates, would be rolled off by the ream. First mortgage bonds would be issued, in amount nearly enough to cover the cost of the property ; of second mortgage bonds there would be issued as much ; consolidated bonds to cover mortgages already resting on the road ; income bonds and common and preferred stock ad lib. The terminal bonds would cover the terminal property ; the argument of the Seney financiers being that terminals are really real estate, not railroads ; and real estate always has its value, and should be covered by a real estate bond. Equipment, also, is not road, so that must be got on car trusts, First OUR MON'EY WARS. 261 mortgage six per cent, bonds may be held at 90, and the ter- minal bonds also ; the seconds may bring 75 ; income bonds, 40 ; the preferred stock may be sold for 25 ; and anything over 10 for the common is unexpected gain. Having worked off these alleged securities on. the public; the " Seney Crowd " would leave them to be kicked about Wall Street, for any price they could fetch. Recently the East Tennessee company (which is theirs) held a meeting ; and authorized the issue of an additional $10,000,000 of bonds ; $3,000,000 of preferred stock, and $13,000,000 of common stock, — the bonds to be issued only on newly-acquired property. The trifle of $16,000,000 of stock will be loaded on to it in addition. As the East Ten- nessee company has only $83,000,000 of securities now out- standing (exclusive of car trusts), the new issue will bring its obligations up to the respectable figure of $109,000,000. This is in the true Seney style. [But the Seney Crowd could not long emulate Gould, — who is his own crowd ; and great was the fall thereof. — S. L.J Here is another version, from Henry Clews' book. Henry's stomach is not easily turned ; but he draws the line at Seney and Eno ; he thinks them " crooked ", — in fact, " not respect- able." After showing that Seney helped to bring on the panic of 1884, he gives particulars : — Seney was a great patron of churches and religious insti- tutions. He was probably the most eminently respectable financier in Wall Street ; where he carved out an original course for himself in speculation — so original, in fact, as to stamp a number of enterprises with his name. The Seney properties became almost as familiar to the financial world as the Goulds, the Vanderbilts, and the Villards. Mr. Seney's chief securities (so called through the courtesy of speculative parlance) were Ohio Central, Rochester and Pittsburgh, East Tennessee, Virginia and Georgia, and the celebrated " Nickel Plate " Road. These were known as the Seney Syndicate properties, and the system of handling them was entirely novel in the history of Wall Street ; causing the financial veterans of Wall Street to stand and stare at the boldness and rapidity of the Seney movements. Instead of starting with moderate issues in amount, — -as has usually been the custom of most men handling railroad and telegraph properties, — and doing the watering process 262 OUR MONEY WARS. by degrees, Mr. Seney boldly began the watering at the very inception of the enterprise ; pouring it in lavishly and with- out stint. There was nothing mean or niggardly about his method of free dilution ; the sight of which threw some of the old operators into a fit of consternation. The stocks were strongly puffed ; andas they were so thoroughly diluted, their owners could afford to let them get a start at a very low figure. The future prospects of the properties were set forth in the most glowing colors ; the public took the bait, and the stocks became at once conspicuous among the leading active fancies of the market. The cause of the vigorous life and amazing activity so suddenly imparted to the stocks of the Seney Syndicate, can only be revealed by a careful perusal of Mr. Seney's check- book ; which, if still in existence, will show commissions paid for the execution of the orders to buy and the orders ex- ecuted to sell, — both by the same pen and in the same hand- writing. These transactions, in the language of the " Street ", are called washedsales. In this way, Mr. Seney was understood to have maHea very large amount of money ; and from being almost one of the poorest men in Brooklyn, he soon became marked as the richest. While he continued to thrive, it was a singular fact that the majority of his financial friends seemed to fall into a decline. When the affairs of the Seney enterprise were wound up, it was discovered that these people had little left, except the certificates which bore the high-sounding term of the Seney Syndicate Property. One peculiarity about Mr. Seney, in his social relations, was, that while he appeared almost bereft of sympathy for used-up friends, — whom his schemes had ruined, — he drew largely on his immense gains for philanthropic purposes ; and, in the aggregate, must have distributed over two million dollars in a very magnanimous manner. " It would seem," adds Mr. Clews, " that Mr. Seney at one time aspired to be a great philanthropist ; and had it not been for the expose which was the result of the panic ; he might one day have stood in as high and lordly a position as the renowned Peabody, — -with even a greater reputation as a financier. It is sad to picture the contrast presented by the de'nouement, with what might have been, in a career which OUR MONEY WARS. 263 began with so much promise ; dating from the time that Mr. Seney was installed as president of the Metropolitan Bank, — whose standing and credit were the highest in the State. Mr. Seney's speculative career affords an example of the way in which this kind of speculation reflects on the stability of our best banking institutions. The lesson is one that should be carefully taken to heart, by the financiers of this country." After these moral reflections, Mr. Clews proceeds to sketch the career of another estimable financier, — Mr. J. C. Eno, the former president of the Second National Bank. Most of the money lent by that bank was upon collateral securities ; which, — for convenience as well as for safety, — were kept, not at the bank, which was situated under the Fifth Avenue Hotel, but in a vault down town. The capital stock of the bank was $100,000; and it had $4,000,000 of deposits ; all of which was appropriated to speculative use by this smart young man ; who decamped to Canada in company with a Roman Catholic priest. Instead of loaning the money to Wall Street brokers, — as he represented to the directors, — he placed it as margin with his own brokers, in various speculative ventures ; and in that manner he made away with the entire $4,000,000 of the bank's deposits, without exciting the least suspicion in the confiding breasts of the directors. " Such another instance," says I\[r. Clews, " of a clean sweep of the deposits of a bank, by any of its officials, is probably not on record, in the whole history of this kind of manipulation." But Mr. Clews makes a curious omission. Who were the brokers that received Eno's stolen money? I^id they know it to be stolen .' If they did, were they not as culpable as the thief ? A somewhat celebrated case is now [1890] before the New York courts. It is that of Eno vs. Seymour, Baker h. Co. In bringing this suit, Mr. Eno alleges that the frauds of Sey- mour and Baker, the brokers who transacted his business, were the cause of his ruin. Were these brokers exceptional, Mr. Clews ? Would many firms in Wall Street have rejected the business which Eno brought them ? Did Eno have to go far afield before he found two men of his own kidney ? 264 OUR MONEY WARS. Eno swindled his depositors. His broliers swindled Eno. Is tlie case so unusual ? Vanderbilt Gets Palaces and Respectability. — Wm. H. Vanderbilt was in high feather in 1883. In that year, he built his Fifth Avenue palaces ; and had the great masquerade ball, at which Abram S. Hewitt appeared as " King Lear before he was crazy." This was the first step toward " com- plete respectability," on the part of the Vanderbilts. It was a success. Their sins are already forgotten by most people ; and only the virtues of their bank accounts are remembered. But we, who don't forget, will take a few peeps at them. Here is a spring item of interest, about this royal personage. The Wall Street News of New York says : " W. H. Van- derbilt's check for April interest, on Government fours, was ^402,000 ; or interest on jS4o,2oo,ooo of bonds." This is quarterly interest. So our Lord Vanderbilt practically re- ceives an annual pension from the people, — ;for no service whatever, — of $1,608,000. We say no service. What has he done for us ? He has exchanged our non-interest-bearing notes for our interest-bearing notes. In other words, with unlimited power to issue all the non-interest-bearing notes we need, we have, instead, to form an excuse for supporting our rich loafers, issued interest notes, and then made an even exchange. We cannot blame Vanderbilt. We have offered him a million cows that give milk, for a million cows that don't give milk ; and he has accepted our offer, — upon con- dition that we shall shelter and feed them. — Indianapolis Globe. And here is a summer item, from cynical Rigolo of N. Y. Sun : — It looks as if business would be uncommonly dull in Wall Street, all through the summer. Mr. Vanderbilt has returned from Europe ; but he ignores the Street, drives Maud S., and concentrates all his energies upon beating Frank Work's team. He even refuses to go to Saratoga ; and the stock- brokers, who have summer offices there are in the depths of woe ; as there will be no one on the piazza of the United States to give valuable friendly points. For several years past, Mr. Vanderbilt has divided with the congress water and the roulette and faro tables, the honor of being one of the main attractions to the Springs ; and it will be highly interesting to watch his old torpid-liver chums, who will now be de- OUR MONEY WARS. 265 prived of their only intellectual and conversational resources, — the repeating of what "Bill" says about stocks, Maud S., Frank Work and the " common people " ; who take the liberty of criticising anything with which Vanderbilt's naiiie is con- nected. The original Vanderbilt had " wanted the earth," and felt that he had it. The brutal ways of the old commodore are thus described : — The despotic will of the old sailor, — disre- garding everything except his personal comfort and aims, — is still on the surface. Speaking a short time ago on the subject of " rapid transit ", he said in the rudest tone it was ever my lot to listen to : "I will have nothing more to do with it ; and I don't care what New York wants ! I was willing once to give rapid transit to the city I have met opposition, and there is an end of it ! And no member of my family shall ever have a hand in it, as long as I live." This was in Democratic America. And the old highway robber died unpunished, and, in fact, in the odor of sanctity. Is it any wonder that the Democratic Republic is practically dead? Thurber on the Lard Failures. — Here is plain talk from F. B. Thurber's Anti-Monopoly Justice, on the " Lard Failures " in 1883 : — A Chicago press dispatch says : " Every creditor of the late suspended firm of McGeoch, Everingham & Co., — who failed for $6,000,000, — -has, it is said, signed the 50 per cent, compromise ; and the $450,000 cash to pay un- secured creditors is to be sent here Tuesday. It is expected that the firm will be reorganized, and resume business in about a month. Its commission business, before the failure, was worth $300,000 a year." When one firm makes $300,000 per year in commission, it "shows what a nation of gamblers we have become. The above firm had no legitimate busi- ness; they were simply speculative gamblers — public ene- mies ; who ought to be drummed out of town to the tune of " The Rogues' March ; " And yet, very likely, they stand high in the Church ; and contribute as regularly to its reve- nues as do the pious Sicilian brigands. The only way to reach commercial gamblers, who manufacture and trade upon false reports (as gamblers do with marked cards), is to put them in the same social and legal category, — make their acts unlawful, and disreputable. That they are equally unscru- pulous every one knows ; and that they are more dangerous 266 OUR MONEY WARS. to the community, is indicated by the following from the Chicago Tribune : " No mere blunder, commercial or other- wise, could entail such widespread disaster in two hemi- spheres, as followed the collapse of the lard corner in this city. The act must take high rank among the crimes which are committed against society. Human greed, — seeking riches through the means of an unnatural inflation, — has entailed severe loss upon hundreds directly ; and upon scores of thousands indirectly. It led to the blocking up of the channels of trade ; to a forced production of material ; and fostered a perversion of commercial ethics ; the last being not least among the evils which followed in the train of the movement." The Trade Dollar Nuisance. — There was much trouble from the trade dollars this year, that were everywhere thrust upon innocent people; and refused by the sharp ones. July 23, 1883, Secretary Folger replied, at length, to a Dr. James C. Halleck, of Brooklyn, N. Y., who had urged the President to order the receipt of the coin at the Treasury, the same as the standard dollar. He enclosed a letter from John Sher- man, setting forth how this dollar having become of less value than Greenbacks in 1877, he had stopped the coinage ; and that since then it had been worth only the bullion price of its silver. The Greenbackers at this time had the laugh on the "intrinsic value" bullionists : since the trade dollar has 8 grains more of silver than the standard dollar. Again we remark " The law creates money." " These be Your Gods, O Israel ! " — We finish this year, 1883, with another " elegant extract " about Vanderbilt and Gould : — The Herald hit the nail on the head, when it said yester- day, that last week's events in Wall Street hardly bear out the oflScial utterances of Mr. Vanderbilt, that Lake Shore was cheap at 120; and of Mr. Gould that Western Union would certainly be advanced, on its merits, to par. So, at least, think a great army of martyrs, who bought these stocks on these gentlemen's representations, and now find them- selves minus their money. Mr. Vanderbilt has built himself a big house, and seeks to purchase or force himself into social recognition. Mr. Gould is, perhaps, satisfied with hav- ing simply skinned the Street. Neither one nor the other is OUR MONEY WARS. 267 likely, in the long run, to secure either social or financial advantage from the very questionable proceedings which have attached to their former stock deals ; and which have / been especially prominent in the present one. Lying, trick- V ery and device are gradically becoming the sine qua non of a successful stockbroker ; and it is lamentable to say that the in- struction comes from the headmen ajid the wealthiest operators. 1884. A Wall Street Panic. — The year 1884 is noted as that in which occurred a Wall Street panic, that would have spread over the country, if it had not been for the increased currency through the silver legislation, and for the fact that resump- tion had been accomplished by yielding largely to the demands of the Greenbackers. Noticeable among the failures this year, were those of Grant and Ward, James R. Keene, Commodore Garrison and the Metropolitan and Marine Banks. Boston despatches of Feb. 27, 1884, complained that now, for the first time, Boston banks were " compelled to yield to the silver policy of the Government. On account of a great output of silver certificates among the banks, by the Boston Sub-Treasury, the Clearing-house had been driven to admit them for the settlement of balances." A Great Victory. — One of the greatest victories obtained by the Greenback Labor party, was the second endorsement of the Greenback by the Supreme Court, in March, 1884. This decision declares the constitutionality of the act of March 31, 1878, reissuing Greenbacks in time of peace. Space will not permit the quoting of long opinions about this important matter. Geo. S. Coe considered it " The most disastrous thing that has happened in the country since the beginning of the war." Since the beginning, mind you ! — worse than any rebel victory. That is what one might ex- pect from Coe. ( )n the other hand, banker A. S. Hatch says, " My general conviction is that the decision is a good one." The Times thinks it " a proof of demoralization." The Tribune sneaks right up onto the fence. Many Marvelcjus Facts are hinted at, in the following, of April, 1884, by Rigolo, of New York Sun. Among these is the fact that there were few failures during the great come- c^ 268 OUR MONEY WARS. down in stocks in 1883-4 : and that the few leading specu- lators held up prices so long. If Rigolo could have got pay for telling all he knew, what a tale he would have unfolded ! He said : — The stock market is in a condition analogous to that of a man in the last stage of Bright's disease. The patient does not suffer much pain, but the speedy approach of death is evident in the pinched nose, the hollow cheeks, and the livid tint of the skin. The collapse is likely to come at any moment, and the sooner it comes the better it will be for everybody. The Wall Street organism has shown remark- able staying powers. There were no failures, with all the tremendous decline that has taken place within the last three years, and there are no big failures to be apprehended at present. Consequently, everything is to be gained by a speedy settlement of the agony. Since the patient is in- curable, the sooner he dies the better it will be for the sur- vivors. Another ten or fifteen points' drop in prices, will revive Wall Street business, to -an extent which will astonish and attract into brokers' offices everybody who has any spare cash. But neither investors nor speculators will appear there before the sick man is actually dead. Those who are inter- ested in the revival of Wall Street business (and there are several thousand men who are so, besides the i, iqo brokers) must try to bring things to a focus as fast as possible. It' would be preferable to settle the whole thing before Summer fairly sets in, instead of dragging it for another four or five months, till the moneyed people come back from Saratoga, Newport, and Europe. If men like Gould, Sage, Cyrus Field, Vanderbilt, and a few of the speculative bank directors, had courage enough to see a temporary loss (on paper) of a few millions of dollars, and leave the market to itself, a com- plete revolution would take place in Wall Street in a few weeks ; and they would have a chance to make up, several times over again, the temporary loss which their books might show during the drop. There are fair indications that Mr. Gould shares this view ; for he evidently does not protect his stocks. But the action ought to be a concerted one on the part of all the magnates, if it is to be made a success of. No new life is likely to be infused into stock speculation until Erie is below $10, Wabash and Denver below $5, Read- OUR MONEY WARS. 269 ing and Jersey about $25 and $50 respectively, the Grangers about 10 points down, and the ex-Villards and tlie rest of the list in proportion. At something like such figures, a very fair speculative demand could probably be created both at home and abroad. April 13, 1884, George Ticknor Curtis, — an alleged con- stitutional lawyer, — appeared before the House Committee on the Judiciary, to argue for an amendment to the Consti- tution, that would upset the recent decision of the Supreme Court in favor of the Greenback. He Bucked Against the Wizard. — May i, 1884, Keene suspended payment, after a furious career of speculation in California and New York. He got in with Gould, soon after coming from San Francisco ; and made money till he broke with the wizard, in 1877. Here is an epitome of his after career : Gould is reported to have said, as a595 461,205,960 77,235,022 161,852,139 324,274,918 72.959-652 346,681,016 10,135,000 172,993,607 2,305,111,909 In treasury. 271,843,193 398,508,756 14,389-585 19,202,170 3,401,308 1,976,366 13-316,707 370,000 4.841-754 Amount in circulation 405.931.402 62,697,204 62,845,437 142,649,969 320,873,610 70,983,286 333,364,309 9,765,000 168,151,853 727,849,839 1,577,262,070 I That looks clear but is totally misleading — ignoring as it does the money that has been lost and destroyed in 30 years, and that hoarded as reserves in banks and elsewhere. The method in use in the Treasury department, to ascertain the volume of currency in circulation is, to add to the amount of all the coin minted, all the paper money that has been issued, and from this sum substract the amount held in the Treasury, and assume that the balance is in circulation. For instance. Government statistics ask us to believe that every silver dollar coined since 1878 still remains in the country, either in the banks, treasuries or among the people. We are also asked, to believe that all the subsidiary coin that has been minted since 1878 and $68,418,371 ; a con- siderable portion of which was coined previous to the war, is still in use as currency. Since that is their method of handling the computation of gold and silver extant, imagine the same rule applied to paper money. Even if they wished it, they have no facts upon which to base an estimate of the loss by fire, wreck, flood or other accidents, including the lost and worn-out bills. .So careful a statistician as N. i\. Dunning, author of OUR MONEY WARS. 313 " The Philosophy of Price," gives the following estimate, under date, August 3, 1891 : Amount outstanding as per Treasurer's statement , $1,666,094,420.47 Amounts to be deducted : Loss in gold coin $200,000,000.00 Loss in silver coin 20,000,000.00 Loss in paper currency. 50,000,000. 00 Loss in fractional currency 6,916,690.00 Held as reserves total 603,008,707.00 Held in U. S. Treasury 337,144,089.36 Coin sent abroad this year 61,695,504.00 Bullion counted as currency 76,439,588.00 ^i,3SS>2=4,578-36 Deducting this last sum from the Government statement above, we have $310,889,842.11, or about $5 per capita of population — against $24, claimed by the enemies of the plain people. The following is an able statement of the situation in 1892 from Chicago Western Rural : Inductive Method With Silver. — England, Germany, Holland, Belgium, and other nations of Europe, can buy a given amount of tea in China and Japan, with a given num- ber of grains of silver bullion ; whether they buy their silver bullion at a low price or at a high price. Hence it is for the financial advantage of the nations of Western Europe, to get their silver as cheap as possible. The same rule holds good in the purchase of cotton, wheat, silks and spices in India, of spices and medical supplies in Ceylon, Sumatra, Borneo, and all the Islands of the Indian Ocean ; and of tin ores and ores of other metals from the same quarter of the globe. The cheaper the price of silver, the greater profits European merchants make, and the more easily they can control the trade of the United States, and all other countries on the Western Continent. The reason ought to be plain to every one, why bankers and merchants of London, Paris, Amster- dam, Berlin and other money centers of Europe, are deeply and actively interested in the monetary affairs of all the silver- producing countries ; such as the United States, Mexico, Peru, and others this side of the Atlantic. The reason ought to su OUR MONEY WARS. be plain why they can afford to enUst, intimidate, bribe or hoodwink bankers, merchants, Congressmen, Senators and Secretaries in the United States, and even to spend money like water in controlling nominations and elections of Presi- dents in this country. The bankers and merchants of the chief European business centers, control and draw profits from almost the entire trade of Asia, Africa and Oceanica. They are almost as successful to-day in taking unlimited tolls out of the earnings of Americans, as of the earnings of Hin- doos, Chinamen, and New Zealanders. North and South America embrace the leading silver mines of the earth. When an Englishman or a Dutchman gets con- trol of this silver product, he holds the key by which he can dominate at will the merchandise of more than half of the inhabitants of the entire world. The reason can easily be seen, why the United States Government has been led to place its silver interests in the hands of an International Monetary Conference, now in session at a European capital ; and which is controlled by a large majority of European diplomats. * * The Chicago Inter-Oceati of November 30, expresses aptly the theory of the conspirators on both sides of the Atlantic. It says : " It will thus be seen that the whole subject of the monetary system of the civilized world, is in a fair way to be thoroughly overhauled and readjusted." This is terribly true ; and it will be thoroughly overhauled and readjusted to suit the money mongers of Europe ; and by methods among the most damaging to the business interests of the United States that could be devised ; and by the methods that will serve most successfully to make interest and dividend bear- ing securities continually enhance in value, while the money with which they are to be paid becomes continually scarcer and dearer, — continually costing more labor and products of labor than these securities were worth when issued. Thus the people of the United States, with all their conceited notions of their own intelligence, are placed by foreign in- trigues on a level with the Mongolians and Malays. Doubt- less, our Congress will be asked to register the decrees of the coterie of foreign gold and bond gamblers, and our people will be asked to sanction the conspiracy by their votes. Shall the American voter always continue to swindle himself under the delusion that he must do it in order to be honest ? So Stupid. — The bottom facts of the silver war, as dis- OUR MONEY WARS. 315 cussed in 1892, are well illustrated in the following, from Senator Teller's speech delivered in the Senate, April 20th. Mr. Gray. — I ask the Senator whether he will explain what the mechanism of the process is, by which the vitiation of silver has brought the large export of wheat from India in competition with the grain grown in the United States. Mr. Teller. — I will explain that to the Senator, and it is not difficult of explanation. I will take as an illustration the price of silver to be 90 cents an ounce. It costs to ship wheat from Bombay, Calcutta, and other places in India, to Great Britain, just about twice what it costs us to ship it from New York. It passes through a region of country hot and unhealthy even for wheat ; and when it reaches Great Britain it is not the best of wheat, and not as good as ours, but it comes in competition and fixes the price of American wheat. Now, let us see how it is done. The India shipper can buy wheat for $1.20 a bushel, and he can send it to Great Britain and sell it for 90 cents a bushel, gets 90 cents and no more. The English shipper, who takes it from India to Great Britain and sells it, gets gold for it. He takes the 90 cents and buys an ounce and a third of an ounce of silver. That costs him ^1.20. What does he do with that silver? He takes it back and puts it into rupees at $1.38 an ounce. He has got from $1.84 to $1.85 for his wheat, while the Ameri- can wheat-grower, owing to this beautiful system of finance of ours, has got his 90 cents. He gets a little more than that, for wheat has been worth a little more than 90 cents. I only use this as an illustration. Does the Senator' understand now how that is done ? If not, I will explain further. Mr. Gray. — I should like to have the Senator explain further. Mr. Teller. — The Senator does not: see it yet. Let him take a pencil and a tablet ; let him put down the price of wheat in Bombay at $1.20; let him add to it the 14 cents, the cost of transportation, and he has got I1.34. That is what it will cost when it gets to England, and he realizes $1.84 or $1.85, according to the market price of silver, for his wheat. Can the Senator make the subtraction of $1.85 and find a fair margin for the Indian exporter ? Mr. Gray. — I do not want to interrupt the Senator ; but 3i6 OUR MONEY WARS. in both cases, both for the bushel of wheat shipped from this country and the bushel of wheat shipped from India, the producer is paid in London or in Liverpool in gold, is he not ? Mr. Teller. — Certainly, and if the American wheat-grower buys silver he brings it back here, and it is still at the same price it was when he got it in London, and it will not buy any more than his 90 cents of gold. But if the Indian mer- chant takes it back to India, it buys as much, ounce for ounce, whether it is in coin or in bullion, as it did thirty years ago. That is, the purchasing power of an ounce of silver is in India ^1.38, and it has cost him 90 cents. Mr. Gray.—\ will ask the Senator whether the 90 cents which the American grower gets for his wheat in Liverpool, when it comes back here is not equivalent to 90 cents in gold .'' Mr. Teller. — Certainly it is. Mr. Gray. — Then, what right has he to complain .? Mr. Teller.- — Mr. President, he is so stupid in this country that he does not complain. [Laughter.] The American wheat-growers have sat by and clapped their hands for both of these great political parties, who have been cutting their throats. They will complain after awhile. But still the fact is, our producer has for his bushel of wheat 90 cents and the Indian has for his $1.84 to ^1.85. Liverpool price in silver. In the year 1873, when silver was demonetized, India for the first time sent wheat to the market ; she sent then 290,- 000 bushels. This year, in eleven months, she has sent 50,000,000 bushels of wheat, to compete with the wheat- growers on American soil. At the time silver was demone- tized here, Russia had never put into the markets of the world more than twenty-five or twenty-six million bushels of wheat. In less than six months now, with a famine in one-third of her land, she has put 100,000,000 bushels of wheat in Europe. India had never sent any wheat ; she never could send any wheat while silver was at par. Another item from Henry Carey Baird, in answer to the wonderful Mr. Harter of Ohio, is full of meat on the gold question. He said : Gold Imports, 1878-1892. — Being desirous of reaching sound conclusions as to the effect of silver legislation on the movements of the " metal ", let us now rather attempt to form them from the longer period of fourteen years, which has OUR MONEY WARS. 317 elapsed since the attempt to restore silver to its Constitutional position of a " money metal ". On February 28, 1878, the so-called " Bland bill " became the law of the land, and on May 31 of the same year a per- manent stop was put to the contraction of the Greenback circulation. Now, what has been the result ? In the four- teen years commencing July i, 1878, and ending June 30, 1892, while producing (January i, 1878, to December 31. i8gi), $486,000,000 of gold, we have actually gained by im- port ^108,837,000 of that "metal". The extent of the workings of this " vast engine " of civilization, not of " con- traction ", in adding to our gold resources nearly $595,000,- 000 is indeed great ; but in addition, up to November i, 1892, we had added over $500,000,000 in silver dollars, silver cer- tificates and silver Treasury notes, to the circulation, outside of the United States Treasury. These are great sums, but they are not all. While on March 15, 1878, the loans and discounts of the national banks were but $854,750,000, and their deposits but $613,000,000 ; by September 30, 1892, the loans and discounts had swollen to $2,153,498,000 and their deposits to $1,779,295,861. What a vast addition to the in- strument which mobilizes the services, commodities and ideas of the people. 1893. Panic of May. — Again the solemn horologe of the years strikes ; and we are in the May panic of 1893, not to mention the Fair. The Wall Street men admit that they permitted the panic because Secretary Carlisle dared to propose to do right, and " redeem " Treasury notes in silver. Deep thinkers are still very much occupied with the basic facts concerning the rise of gold, while silver and all staples have remained about stationary for 20 years. Henry Carey Baird has this about India and America. — The imports of raw cotton into the United States are not for the South the only or the most alarming feature in the cotton situation to-day. Not only do Egypt and India compete with the South in Europe, but since the depreciation of silver the development of cotton manufacturing in India has become a fact of great, indeed marvelous, import. The depreciation of the rupee without any material appreciation in prices, has acted as a prohibitive 3i8 OUR MONEY WARS. tariff against the rest of tire world, in India, China and Japan, with cotton goods. With this has developed a wonderful export trade of India with China and Japan, especially in cotton yarn. In a speech by Mr. John A. Beith, delivered at a town meeting at Manchester, England, called by the Mayor, October 27, 1892, the following statement is made: " But if we go more deeply into the matter, we find that during the period when there were exceptional causes for its expansion — such as the opening of the Suez Canal, the quadrupling of the railway system of India, and a reduction of steam freights almost as low as sailing vessel freights, through the discovery in engineering of the triple expansion system — not only has our Eastern trade been retarded, but the practical refusal to take payments in the money of the East, except at an enormous discount, has diverted the chan- nels of trade; and silver-using countries, such as China, have felt themselves compelled to go past Manchester and to trade with silver-taking countries. Now the figures on this question are absolutely appalling. Indian mills did not begin their . existence with this change in the currency. For ten years before this change came, Indian mills were in existence and were working vigorously, and making progress in India; but during the whole of that ten years were practically able to export nothing. Manchester had, up to that time, always ' taken the cake ' in the neutral markets. " In 1874, the total exports of yarn from the Indian mills to China and Japan amounted to only 1,000,000 pounds. It was only in 1875, and when silver had fallen 3 pence per ounce, that the 1,000,000 pounds of exports, which it had taken Indian mills nearly ten years to get up to, at once ex- panded, as if in obedience to the wave of an enchanter's wand, into 5,000,000' pounds. In 1880 there was a further fall of 5 pence per ounce ; and consequently a further advan- tage to the silver of India and Cliina, as compared with England, accepting only gold payments, and so, then, the 5,000,000 of exports from India became 25,000,000. In 1885 another fall took place, and the 25,000,000 became 75,000,- 000. In i88g there was a further fall of 5 pence in silver, and the 75,000,000 became 127,000,000. In 1891 there was still a further fall, and the 127,000,000 of exports of yarn from India to China became 165,000,000; so that in seven- OUR MONEY WARS. 319 teen years, through the operation of this cause chiefly, 1,000- 000 pounds of yarn exports per annum had risen to 165,000,- 000 pounds per annum. " These are very large figures, but if you look a little more into the details they become even more appalling. One hun- dred and sixty-five million pounds of yarn, sent from Bombay to China and Japan, means that India is sending six times as much as the United Kingdom sends to China and Japan, twice as much as the United Kingdom sends to India, China and Japan together ; and is itideed very fast approaching the figure of Lancashire's total exports of yarn to the vv'hole world. If the ratio of increase continues as hitherto, the shipment from India will exceed in from three to four years, the total shipments of yarn from the United Kingdom to the whole world, including India, China and Japan." Verily, verily, the South must soon revive its political economy ; and the hour when this people ceases to be domi- nated by cotton, will mark as great an advance in our prog- ress and civilization, as does the first day of Januar}', 1863, when slavery was, by proclamation, abolished. Thedisadvan tagesthat have grown out of the belief of the Southern people in the domination of cotton, during the past seventy-five years, have vastly outweighed any national advantages arising from the cultivation of that staple in the United States. The dethronement of the American cotton tyrant will therefore, be one of the grandest and most beneficent events, in all our history. May it therefore come, and come quickly ! Henry Carey Baird. Philadelphia, March 21, 1893. OUR MONEY WARS: THE EXAMPLE AND WARNING OF AMERICAN FINANCE. ALPHABETICAL INDEX. "Addition, Division and Silence," 138. Alloy in Metal Money changed in 1837, but the silver In the dollar not changed, 68. Assignatf, French. Based upon con- fiscated estates, afterwards returned to the old owners, 30. >]ine billion dollars issued and much counterfeited by enemies of France, 30. Associated Banks. Treason of, in 1879, 230. B. Bank. Charter Bi'i of 1882; how the banks evaded it, 256. Curi-ency for 60 years, 184. First United States, founded in 1791; a good, useful bank, because its notes were received for all Government dues; in 1811 its time ran out and State banks came in, bringing much calamity; neither U. S. Bank ever suspended, 31. Notes first printed in Sweden, 4. Of England, ex-Governor Gihbs of, on silver, 296. Of France, how and when organized, 11. Of North America chartered by Congress in 1781, at the suggestion of Robert Morris; a good banli, 28. Profits, boasts of, in the Hankers' Convention ' of 188-j, 259. Second United States, organized in 1816,49. And continued as U. S. Bank of Phil- adelphia (Biddle's), stopped in 1839, and closed in 1841, 75. Banking in the Northwest in 1835. Alexander Mitchell takes a hand in; how the farmers rescued him, 64. Bankers' Rebellion, The, of 1881; Con- gressman Gillette on, 246. Banks. In luck in 1836, as Government depositories at two per cent; they steal forty millions, 67. National, authorized Feb. 25, 1863; Sherman pushed them to replace Greenback*!, 112. New York, suspended in 1861, 102. Retiring circulalion in 1884, 273. State, volume of from 1811 to 1858, 40. AVild Cat, m full bloom in 1809; grand smash of them in New England; all founded on personal notes, 39. Wild Cat, in New England in 1849, 86. Baird, Henry Carey. On Secretary Fol- ger in 1881, 253. Benton, Thoma^i. Favored Government versus bank money, 69. Defended Jackson, 70. Belmont-Hewitt-Tilden Democracy in 1885, 279. Beecher's Deacon White, 303. Black Friday in September, 1869, caused by call loans; gold went to 62l^, 146. Blaine, J. G. Right this time on Gov- ernment loans to banks, 288. Bland Bill. Passed over President Hayes' veto, 221. Senator Teller on, 221 Bond*Age,The,206. Bonded Debts, The, of all nations, 239. Bonds. For currency; a two billion steal from 1862 to 1868, 143. Not pay- able in gold, said Congress in 1878, 220. Six per cents of 1864, 125. Sold after Jan. 1, 1879, 234. The, to pay ac INDEX. once, 240. Who held them at first, 237. Bi-adslreet's False Statement, 272. Brice, S. M. Tells of the robbing pre- payment of gold interest by the United States for sixteen years, 119. Bright Idea. Whose? 243. British Board of Trade in 1764 objects to American paper money. Keply by Franklin, IG. British Chanoelor on the shame of gold basis, 298, Broken banks, etc., in 1873, 175. Brokers not Useful Citizens. New York Tribune admits it in 1884, 277. Buell Circular, The, 212. Bullion, Production of, 1852 to 1876, 88. Butler, Ben, and Butler Duncan, 200. C. California. Cleansed, 232, Monopoly's pandemonium in, 200. Californians. Foolish in 1876, 206. Calhoun, J. C. Favored Government money if legal tender to the Govern- ment, 70. On paper currency, 70. P»aises that of North Carolina, 70. Carey, Henry C. Blasts Hugh McCul- loch as a traitor, 130. Describes the rise of a financial crisis, 73. First thoroughly described "bank wind" in his "Credit System" in 1838, 74. On McCulloch's treachery in the •• Fort Wayne Decree," 127. Carlisle Refunding Bill, The, of 1881, 245. Chicanery of the banks about it, 245. Good work done by Secretary Windom, 245. Carpet Bag Debts, 151. Cash Payments. W". D. Kelley on the blessings of, 138. Century Magazine. False statements of, about cheap money, 5, Chase, Salmon P., Secretary. Fright- ened out in 1864, 125. Chase, Solon, and " them steers," 197. Chamber of Commerce, of New York. Secretary of, on currency contraction, 168. China. Drained of gold about 1850 by Europe at 5 to 1, 87. Chicago Tribune on the fraud of 1873, 226. Clearinghouse, New York. Established in 1853, 89. And the Treasury in 1884, 274. Coe, Geo. S. His misstatements, 48. Coin and Bullion in Europe in 1876, 207. Coins. Foreign, Actof 1816'again regu- lates them, 49. Demonetized in 1857; nickel cents and three emits created, 90. Small, unlimited tender in 1800, 38. Value of, 6xed by the Whig law of 1843. 81. Value of iu 1793, 35. Colwell, Stephen. Money based on coin a locomotive on a one-horse cart, 97. Congress and Contraction, 201. Continental Money. Albert Gallatin said it saved the country, 24. Birkey said it took the place of a war tax, 25. Calhoun said it is the ghost conjured by bank monopolists, 25. Full story of, 19. Jefferson said it expired with- out a groan, 24. Lost but once — the funded debt lost every eleven years, 25. Neither money nor promise to pay money by any State or nation, 20. Contraction. Act of April 12, 1866, turned $1,300,000,000 into bonds, 136. Moses w. Field's statement, 173. Cooke, Jay & Co. And McCuUoch & Co. *s London bank; its bogus founda- tion, 112. They shove the 5-203 in 1863, 117. Coon, A Treed, 283. Cooper, Peter. His point of departure fromShylock, 179. Crawford, W. H., Secretary. On a de- creasing cnrx'ency, 51. Credit Mobilier and Tweed Ring in 1871, 154. Credit Strengthening Act of 1869. A direct steal of five hundred millions, 144. B. S. Heath on, 145. J. G. Drew on, 144. O. P. Morton against, 144. Currency. Elastic ; not furnished by national banks, 250. In 1865; total, Birkey 's figures, 131. Of fifteen na- tions, 238. W. D. Kelley, Logan, Hotchkiss, Morrill, Loughridy and Knox on, 132. D. Dallas, G. M., Secretary of Treasury in 1816. Favored Government money, 49. Debt, National. Why a blessing, by Henry Carey Baird, 188, Debts in the United States, 217. Demand Notes of 1861, 101. At par with gold, 102. Full legal tender March 17, 1862, 110. Democrats, Hungry. What they did in 1874, 187. Democrats repudiate resumption in 1876, 206. Devouring Demon, A, in Philadelphia in 1879, 230. Dix, Governor J. A. Folly of in 1874, 178. Dollar. Gold and double eagle created in 1849, 86. Of Urazil, Central Amer- ica, Mexico and Peru made legal ten- der by act of 1834, 60. Do you think, O fools? 307. INDEX. E. England. A thousand millions out, 231. Hangs on to gold, 17S. England's Panic of 1866. Had no effect Lere, as we were not on a specie basis, 136. II. C. Carey on, iri7. England's five billion dollars of credit monev, 158. English, The. TIipy notice our amaz- ing folly. 218. AV. H.; his bank's good picking, 240. F. Failures. 1862 to 1890, 228. Fair Gambles. Matthew Marshall on trusts in 1889, 291. Fessenden, Wm. A high-toned ropudi- ator, 103. He gives the currency of 1864, 125. He, who ought to know, says that the liftinjj: of gold to $2.85 was a ci'iminal act, 126. Five Twenties. Their origin and history by J. G, Drew, 109. Who bought them, 111. Foster, Secretary, and his 7-30r, 204. France. Steady curi'ency of, 57. Helped the world by liolding gold and silver together, 85. Franklin, Benjamin, On paper money, 16. Fractional Currency. Fiftv millions is- sued by Act of March, 1863, 115. Called in, 1876, 203. Freedman's Bank of 1SG5 ruined by sharks, 129. French Paper Money. How France paid Germany, 1-32 . Frewen, Morton. Curious proposal nf, 282. Futures, gold. Stopped and Unstopped in 1864, 124. G. Gallatin, Albert. Describes bank notes, 73. Garrison, Commodore. Failure of in 1884, 270. Gi-rman Business Men plead for silver in 1872, 157. (Gladstone, W. E., ts. gold basis, 203. (iod-niade money, 149. Godkin's Ghoulisb Glee, 274. Gold and Silver in a nutshell, 293. Gold. Big-bug papers, 232. Bug tricks, 199. Demonetized by Holland in 1850, 87; Germany and Austria in 1857, 95. Drainage from Europe in 1882, 254. Flour and beef for fourteen years, 190, Fluctuations of in Eng- land from 1810 to 1820,39. Imports, 1878 to 1892, 316. Rushes from Europe in 1879, 235. Sales of by the Secre- taries wrongly managed, 121. Stick- ing in the West, 251. That the bank- ers had in 1879, 2.J4. The fall of, Chevalier predicLs it in 1857, 94. The Peel act arbitrarily fixed the price of in 1844, 39. When demanded by our laws, 304. Crould, Jay. Apotheosis of; bis early career, 155. Becomes respectable, 241. James Keene on, 249, Must be sustained by the Equitable Life In- surance Co., 247. Gould's greatness in 1884, 276. Government Loans on land and goods ; Brazilian facts, 294. Gr.uit, President. Conquered by the blinkers, 179. Does unintended good in 1876, 205. Gray, Lieutenant-General of India. On financial experts, 301. Great Heads Kattled, 281. Greenback Labor Vote in 1878. A mill- ion four hundred thousand, 224. Greenback, The. Remonetized in Octo- ber, 1878, by John Sherman, 225. Greenbacker, an Original, in 1814, 43. Greeubackers Organized Dec. 1, 1875, 201. Greenbacks. And National Bank notes compared, 239. Bought for $40 on $100, 116. II. Harrison, Benj. Elected as a rebuke to Van Bureu's gold and silver folly and bungling sub-treasury plan, 75. Hazzard circular, the, 110. Uoath, B. S. His allegory on gold basis, 107. "The Great Bear." 107. High Treason of the Controller of the Currency in 1888, 290. Honorius on Food Forestallers, 258. I. Income Tax. Repeal of in 1870, 150. India and Amerit-n, 317. Indiana Treasury Notes, in 1841; a good money, 78. Inductive method with silver, 313. Inflation by Hunks in 1873, 172. Interest-Bearing Notes made legal tender Juno 3, 1864, 122. Interest. Compound, 241. Coming down, 254, Equaled the public debt in 1879, 233. Harvestin 1878,228. Inter-Ocean, The. On currency vol- ume ; is hoist by its own petard, 222. Intrinsic Value. Senator J ones on, 302. Jackson, Andrew. Message of Dec. 3, 1833, 60. Proposed a currency founded upon the credit of the Government and its revenues, 57. Removes the de- posits from the XJ. S. Bank in 1833, 59. INDEX. Took hold in 1829, 57. Vetoed the re- charter ottlie Bank in 1832, 58. Jefierson, Tbomas. Accused the bank- era of usury and swindlintc, 4'2. Jesuitical nonsense of Nf u' Yurk Sun in 1882, 253. Jones, Senator J. P. Raw a grreat li^ht in 1881, 248. On prices of wheat and cotton, 293. K. Keene, J. K. Bucked against the Wiz- ard, 2t)9. Kelley, Judge AV. D, Pleads iguorancf, 134. Wise Philadelpbians rebuke him, 134. Kellogg, Edward. A great thinker cries " Enreka" in 1837, 73. Kilpatrick, General. Ou the *' bloodj' shirt," 205. Knox Knocked Out in 1882, 255. 1864 and 1865, U6. Indian Wampum, 1. "Market" easiest in the hardest times, 2U7. Pine Tree in 1652,3. Money, International, impossible, 62. Money of Account. Fixed in 1792, 34. In some countries only an idea, 34. Let the mt-tals be adjusted to the scale, but not be the scale, 35. Sir James Stewart on, 35. The American decimal system the first money of ac- count ever fixed by law, .S5. Monej', Piiper. Ben. Franklin on the prosperity it brought, 13. First ' American, in 1690, i-eceived for public dues and par with coin for twenty yeais, 4, Founded on the plunder of Loui'^burg, 15. Founded on real es- tate, 6. From 1720 to the RcTolution, 14. Monopoly of money. New York Legis- lature on in 1818, 51. Land Loans of F(.'nueylvani;i. David Hume on, 19. Forbidden by England in 1773; this a chief cau-^e of tlic Eeviilniiou, 19. Praised bv Franklin and Thomiis Powell, M. P., 18. Law, John. History of this great man, 6. Leading Misleading Paper*, 214. Legal Tt-nder. Coin firbt limited in is 3. Ditlercnt money for rich and poor, 88. From 1789 to 1862 the power of (jTOvernment tu create full legal tender paper money never denied, 29. Full, passed Feb. 12, 1862; repudi- ated Feb. 25, 1862, lu6. Loan Certificates of 1862, 109. Loans, Foreign. Taking them up in 1795. They made a home loan to pay a foreign one ; not vice versa as in the sixties, 36, Logan, John A , Greenbacker, 178. Lord Chancelors' (-Johl Pensions, 284. Lo^t. Five million dollars a day by con- traction, 190. M. McCuUoeh, Hugh. Began to retii-e Greenbacks, August 1865, 130. B. S. Heath ou, 134. His mad policy, 133. Madison, President. Said that Congress must create money, 49. Martin, Warwick. tLis financial history of the Democratic paitv, 256. Mint, United States. Created in 1792, with 1 of gold to 15 of silver, and a silver dollar the unit, 33. IlowUaui- ilton got the silver dollar, 33. Monetary Commission of 1876, 208. Money. An immense issue began July, 1861, 101. Brought bv Bncc.meers, 3. Cattle and lumber legal tender, 3. Early legislation on, 3. Enough only in N.itional Banks. A howling success, 141. Eighty-six orgauized in 1881, 252. Fixed for gambling in 1864, 123. How they boiTow at one per cent, 122. More tricks in their behalf in June, 1874, 180. Nnat little swag of sixty millions for them in 1870 and 1871, 148. The law of July 2, 1870, em- bodies several of -'Sherman's tricks to help the banks degrade the Green- back, 147. O. Ohioldea, the, 244. Old, Old Storv. The Government loans to banks in 1887, 286. Over-certification law of 1869, 144. The banks laughed and " accepted " checks, 256. P. Panic of 1837. Sumner's Story of, 69. The banks all make money by it, 69. VanBuren's picture, 69. Panic of 1847. And its produce specu- lations, 84. Sticking to gold at that time costthe property-holders of Great Britain a billion and a half dollars, 84. Panic of 1857. Demonetization of for- eign coins one cause, 90. Immediate cause England called ?even million dollars of gold, 90. Stephen Colwell on. This cruelty caused by the fool effort of banks to hold specie, 91. Warwick Martin ou the five causes, 92. Panic of 1S60, with 6,000 failures caused hv the failure of banks based on Siiuthcrn Ptock«, 96. Panic of 1873. D. A. Wells on, 173. Judge Kelley on, a graphic stnri', 169. Preparing for, 154. Pres. J. E. \\'il_ INDEX. liams on, 170. Warwick Martin on, 171. William H. Winder on, 173. Panic of 1884 in Wall Street, 267. " Blasted Silver Did It," 271. Mar- velous facts of, 267. Panic of 1885. Manning's. Senator Teller riddles him, 280. Panic of November, 1890, 304. Panic of May, 1893, 317. Paper Money. Beat Napoleon, 47. In the United States for twenty-six years, 236. Outstanding in 1863, 117. Peel's Resumption. Doubleday ou the consequent riots, 53. Harriet Mar- tineau on, 55. Ricardo wrong and Heygate right about it, 51. Sir Archi- bald Alison on its horrors, 52. Pendleton, Geo. H. What " Gentleman George " said, 213. Pensions furnish currency, 302. Per Capita Currency. 1865 to 1885, 216. lo 1878, our fourteen dollars, 224. In 1891, N. A. Dunning on, 312. Phillips, Wendell. Dead, yet speaketh, J91. Playing Ink Fish, 127. * Postage Legal Tender, 111. ■ Postal Currency. Gone in 1876, 203. Production and Banking. Earnings in, three per cent vs. twenty per cent, 154. Promissory Notes. All under five pounds forbidden by the British Gov- ernment in 1777, 19. Public Debt. British in 1689, 1697. French and American war, 4. Puritan and Blackleg. The union of, 275. R. Raguet, Condy. A great American financier, eulogized by Henry C. Carey. Quotation from R.'s book of 1839, 63. Says that it is ruinous to the United States and England to have the same metallic money, 64. Ratio. Change of, between silver and gold, made in 1834 to 16 to 1, was to England's advantage. Technical de- scription of the effect of this change, 62. Of gold and silver in all ages, 295. Refunding Act of 1870. Covered a bil- lion and a half of bonds very wrongly, 148. , Relief Notes of Pennsylvania in 1741, a. great blessing, 77. Republican, St. Louis. Sound doctrine, 249. Reserve. That bogus hundred millions, 257. Resumption. Act of 1875. Scathing review of, 190. Bogus, in 1820, 56. Francis Gillette says " a rough and rocky road," 212. Horrors of, 186. The bitter ciy of Gen. Thomas Ewing, 210. W. D. Kelley on, 192. Review of 1891, 306. RicariJb utters a truth, 62. Robber Nation, the. The ways of, 283. Robbers, Public. Let go in 1874, 181. Rothschilds. Check to them. The Democratic convention of 1868 refuses to demand gold for 5-20'3, 140. Win and Seymour beaten in the presi- dential election in 1868, 142. Saint Louis ponvention of 1892, 310. Savings Banks. The first in Hamburg in 1778, 26. Who use them, 186. *' Seney Crowd," the. High Kicking of in 1883, 260. Henry Clews on, 261. Seven thirties of 1865 to destroy Green- backs and aid National banks, 128. Seyd, Ernest. Was he the original Dr. Jekylland Mr. Hyde? 157. On sQ- ver, 223. Shay's Rebellion in 1785 was a demand for paper money, 27. Sherman, John. Confessed in 1863 that he purposely depreciated the Green- backs, 116. Entering wedge on sil- ver, 139. Silver bill of July 14, 1890, 300. Shoddy and Human Life, 187. Siam. Trade Dollars in, 259. Silver. Bugaboos in 1890, 298. Certifi- cates preferred to gold, 249. Coming deluge of in 1884, 273. Silver Demonetization. Dr. Linderraan on, 162. Gen. A. J. Warner on, 161. Peoria Journal on, 159. Senator Jones on, 160. Senator Teller on, 163. Sundry testimonies on, 164. Warwick Martin on, 163. How it smashed Soldiers,' The. What they lost, 285. So Stupid, 315. Spaulding, E. G. On the exception on the Greenbacks, 105. How he sold out, 106. Speculation in England in 1834, 5 auQ 6, 65. In France and England in 1720, 12. Spinner, F.E. On 7-30's, 204. State Bank Notes. Amount from 1854 to 1863, 117. State Banking. Back to, in 1884, 272. State Banks. Act of Feb. 25, 1815, au- thorized an old folly, 47. Act of March 14, 1814, allowed the placing of Treasury notes with the suspended banks, 43. How created contrary to the Constitution, 414. 41 in Pennsyl- vania in 1814, 44. List of, by Jefferson in 1816, 47. Suspension of, m 1814, 42. They had the Ti'easui-y notes; the INDEX. Treasury had theirs, 42. Taxed to death in 1865, 129. Stevens, Thaddeus. On the exception on tlie Gi'eenbacks, 104. CrieS against gold payment in 1868, 140. Stocks. Boom in 1881, 251. Swindles in 1887, 287. Up two billion dollars in 1881, 252. Stupid Astonishment of the gold bugs, 212. Sub Treasury. Act of 1846 made Treas- ury notes equal with coin in payment to Government, and excluded all bank notes, 83. Act of 1836 repealed in 1841, 77. Sumner, W. G., of Yale. His British Bullion Report dogmas, 82. His idiotic ideas about the tide-like ebbing and flowing of gold and silver,82. On Jud^e Story's "outrage," 53. "Sci- entihc generalization," 52. The Yale '* hen is on," 100. Versus Revolu- tionary father?, 14. Sun, New York. Inconsistent about Jay Gould, 295. Supreme Court. Decision of 1884 for Greenbacks, 267. On legal tenders in 1870, 1871, 149. Surplus of the United States distributed to the States in 1837, 68. T. Ten Day Loans used as money, 119. Ten Forties. The Act of March, 1863, called for 900 millions. All these acts had " a string to them," viz. had pro- visos, 114. Martin exposed the fraud, 114. Three Per Cents, the, 185. Three-Sixty-Five bonds, 151. Thurber, F. B. And his anfi-monopo- lisfs in 1882, 254. On the lard failures of 1883, 265. Tonnage of the Lake Ports, 242. Townsend.S. P. Not alarmed at pros- perity, 68. On the Albany Regency, 68. Wisdom of, 67. Wished gold at • a premium, 118. Trade Dollar. No more issued in 1877, 216. The nuisance of, in 1883, 266. Treasui'y Notes. Absurdity and futility of their not being legal tender to the people, 41. Act to retire them Sept. 12, 1865, 131. Again in 1857 $20,000,000 take the place of coin locked up by banks. 94. Conspiracy of old United Statfs and other banks against them, 46. Declared legal tender by District Attorney Bates in 1862, 102. Destruc- tion stopped Feb. 3, 1868, 140. Draw- ing one mill interest, 72. Foolish caii- celmg of, in the thirties, 73. From 1812 to 1862 received for Government dues, 42. Issue of March 4, 1814, 43. Issue of Dec. 26, 1814, 43. Issue of Feb. 14, 1815 in small demominations ; Gallatin and Crawford praised them; made receivable for six percent bonds and could be re-issued; banks fought them, because of no interest, and they must give coin for them, 44, Judge Story decided they were legal tender to Government, 50. Madison pro- posed them as a " general policy," 47. Of 1812, bore interest and were too large; the banks got them and their interest; the Government got the . State bank notes, 41. Of Dec, 1860; the patient pack mule again, 96. One hundred and fifty millions author- ized by Act of Aug. 5, 1862, 111. Sus- tained the Mexican War, 67. The ■ people refused to give them up in 1819, 50. Twenty-three millions for Mexican War in 1847, 34. Two hun- dred and fifty millions of 7-30's or bonds and demand notes authorized by Act of July 17, 1861, 101. Tribune, New York. Caught napping, 226. Frantic diabolism of, in 1876, 201. Trust Company Profits, 296. Trusts and Syndicates. The deluge of in 1887, 285. Tunis. The Bev of, has coupon bonds, 272. Tyler, President. Had a good instinct about money, 78. His advocacy of Government money prai^ied by the president of the Bank of England, 79. U. United States Bank of 1791 ran to 1811. Madison vetoed its recharter iu 1816; Congress carried it over his veto, 46. United States Bank of 1816. How formed, 49. Act of March 3, 1821, allowed Government to borrow $8,- 000,000 from it, 51. Act of April 11, 1833, stopped its work as a loan agent for the (Government, 60. It spent $3,- 000,000 in briberv, 59. United States Beg'in March 4, 1789, 29. Uprising, the Partial, of a Great People in 1878, 219. V. Vanderbilt, Cornelius. Waters New York Central torty-seven millions in 1868, 139. Vanderbilt, William H., gets palaces and respectability^ 264. Lying and trickery of, 266. New York Sun whimpering about his lies in 1884, 274. He sells his friends, 251. Venice, Bank of. Story of this Green- back bank founded in 1171, 37. Stephen Col well on the glory of INDEX. Venice for six hundred years, 38. The bank seized by Napoleon in 1797, 37. W. Water and Gas gone from stocks in 1883, 259. Wealth. More gained in the United States from 1860 to 1870 than in two hundred and hfty years previous, 151. Wells, David A. Scorched by John G. Drew, 189. A poor creature, 290. Westminster Review on Government money in 1873, 176. Williams, President. John Earl; vs. specie basis, 188. Wilson, Henry. On the exception on the Greenback, 104. Winder, William H. The expert on creditor and debtor nations and a con- vertible currency, 194. Whigs. Could not borrow in 1842. In revenge against Tyler tbey made Treasury notes bear six per cent inter- est, 80. In 1841 they try, in vain, to take up Treasury notes with bonds, 76. Wliite, Horace. On the back and front ofthe Greenback, 285. " Who make lies their refuge," 286. Wolowski. His prophecy of ruin in 1868, from the silver fraud, 142. X, y, z. Year, A, of National Shame in 1878, 219- NOTICES OF "HONEY WARS." The benefit that this work will be to the scientific student of value, will be enormous. — N. V. World. The most remarkable book on finance of the century. — Arena. This book contains much very valuable matter that was in danger of being lost. — Gen. A. J. Warner. It is a valuable comijendiiim of just the kind of information that is being needed to-day. I have constant inquiries for such information from correspondents of mine, and will take great pleasure in calling their attention to your work. — Henry D. Lloyd. No romance of Hugo, no tragedy of Shakespeare, ever stirred the blood as does this infamous record. — Tom Watson, of Georgia. It is acknowledged the Ultima Thitle of the finance question, and must stand undisputed in the forefront for years to come. — Chicago Searchlight. Just the book we have been awaiting for twenty-five years. — Henry Carey Baird. Has created considerable discussion. — Chicago Times. Does not hesitate to place the blame where, in his opinion, it properly belongs. — Phila. City Item. The American system of money rises, like Solomon's temple, with- out the blow of a hammer, in the magnificent sequences of this history. — H. E. Baldwin, in Arena. The book is a great one. Entitles him to the gratitude of every searcher after economic truth. — Editor of Nonconform- ist. It will be the standard for quotation and authority. — f. H. Ferriss, in Arena. The most importam volume yet issued for the cause of the people. — Junction City Tribune. The most valuable financial work that has come to our notice. — Farmer''s Voice. The most complete, accurate and valuable work issued on the subject it treats. — A. C. Fisk, Prest. Pan- Am. Bimetallic Ass''n. Comprehensive, exhaustive, systematic, clear and condensed. — San Francisco Star. No one of our acquaintance is more competent to write an intelligent, truthful and impartial work on the actual occurrences connected with finances. — Western Rural. Will be of incalculable value to speakers and writers. — Chicago Express. Your book is a whooper and no mistake. — C. C. Post. I will positively affirm that no man in this whole country is so well qualified to write such a book. — Editor New City, N. Y. For sale by all booksellers. Sent postpaid upon receipt of the price. Paper, 50 cents; cloth, $1.25. Arena Publishing Cohpany, Copley Square, BOSTON, riASS. From the press of the Arena Publishing; Company . A Bibelot for Booh-Louers. Walter Blackburn Harte *' Motley's the only wear." Price in handsome cloth, $1.25. MEDITATIONS IN MOTLEY: A Bundle of Papers Imbued with the Sobriety of Midnight. This is a bundle of papers written in a vein of delightful humor, and filled with those sober and fantastic specula- tions that appeal to all those lovers of literature who have discovered among the older humorists some of the most agreeable philosophers of their time. " Meditations in Motley" is a book for the fireside or outdoors ; for gray days or sunshine ; for solitude or society. It will take its place among those books handy at one's elbow which one instinctively reaches for as one sinks into a cosy armchair in a snug corner and abandons one's self to the seductions of meditation and firelight — and perhaps a pipe of tobacco. The papers are on the most various topics, and throw light on literature and social questions without touching directly the essay in criticism or sociology. " Meditations in Motley" is a book that tumbles out of every category. It is a book of its own kind — as all who know the writer's work can anticipate. The style of the essays reminds the reader occasionally of the older English humorists, but there is added a suggestion of French sparkle and wit and vivacity and lightness of touch. Che History of a iBreat Social Experiment. Dr. John T. Codman The History of a Great Social and Intellectual Awakening Price in handsome cloth, $2.00. BROOK FARM. Memoirs, Historic and Per- sonal. A complete history of the famous Brook Farm experi- ment has been one of those books which demanded writ- ing to complete the most interesting era of American literature and social thought, and at last we have a volume that covers the whole ground adequately — Dr. John Thomas Codman's " Brook Farm : Memoirs, Historic and Personal." Dr. Codman is one of the few surviving members of the Brook Farm community, and his work has, therefore, the special value of intimate personal knowledge of the inner workings of the scheme and of the character and personalities of the group of famous men who were interested in it. The book will have an im- mediate claim upon the interest of all students of American literature, and of social thought everywhere. For sale by all newsdealet s. or sent postpaid by Arena Publishing Co., Boston, Mass. From the press of the Arena Publishing Company. Fiction : Social, Economic an6 Heformatiue. Price, paper , y> cents; cloth, $1.2$. Byron A. Brooks The New Utopia Hamlin Garland A powerfully Dramatic Novel, dealing with the Struggles of the Poor in City and Country EARTH REVISITED. A story for earnest men and women of the new time. Mr. Flower, in " Civilization's Inferno,'' portrays some hideous phases of modern civilization. Mr. Brooks, in " Earth Revisited," pictures our earth blossoming in peace, joy and happiness, under cooperation. This story, which is charming as a pure, clean love story, is made the vehicle for shadowing forth an ideal civilization through the working of the law of all for all. Few social studies are so helpful in psychical suggestions as " Earth Revis- ited," and probably this work more than any other Uto- pian romance sustains the interest of the reader from first to last. Price, paper, 50 cents; cloth, $1.25. JASON EDWARDS. This work is one of the most powerful portrayals of the struggles of the mechanic in the city and the farmer in the West ever published. It is highly dramatic while per- fectly realistic, and though it ends in a burst of sunshine, its noble lessons will linger in the heart. Hamlin Garland's splendid qualities — his sympathy with humanity, his perception of the subtlest meaning of nature, his power to bring his people before you as if you had grown up in their dooryards — these are his own. Mary E. Wilkins has given us the pathos of humblest New England; Charles Egbert Craddock has made known to us the secrets of the Tennessee Mountains ; Rudyard Kipling has carried us to India; and now, at last, here is the story-teller of fartr) life in those Western prairies among which Hamlin Gar- land grew up, to which he goes back, now and again, with the child's heart, the man's insight. — Louise Chandler Moulton, in Boston Herald. For sale by all newsdealers, or sent postpaid by Arena Publishing Co., Boston, Mass. Fro}n the press of the Arena Publishing Co., Boston, Mass. Serious Ulorhs for Students of Social, Economic anb Political Problems. Samuel Leavitt A handbook for Money Reformers riarion Todd A strong work in favor of Governmental Ownership of Railroads Price, paper, ^'^o cents ; cloth, $1.25 OUR MONEY WARS. The most complete and comprehensive history of Arrierican finance ever published. The book is the result of a lifetime of study and work, and will be indispensable to all who wish to keep posted on the money question. Mr. Leavitt is a man of wide experience, and his work shows not only remarkable ability but great insight and rare courage. Mr. Leavitt has long been before the pub- lic as a contributor to such publications as the North Atnerican Review, the Forum, and the New York Tribune, IVorld a.nd Graphic. In 1878 he was managing editor of Peter Cooper's New York Advocate. In 1883 he was made superintendent. In 1887 he made sixty speeches for Henry George in the memorable campaign in New York when the great reformer polled seventy thousand votes. This book will be a textbook for reformers, and is invalu- able to all who wish to acquaint themselves with the finan- cial history of our country. The chapters deal with the money question during different periods as follows: 1600 to 1700. 1700 to 1776. 1776 to 1786. 1786 to 1796. 1796 to 1806. i8o6 to i8i6. 1816 to 1826. 1826 to 1836. 1836 to 1846. 1846 to 1856. 1856 to i86i. 1861 to 1866 (the war period). 1866 to 1873. 1873 to 1880 (seve.n years of famine in a land of plenty). 1880 to 1885 (the triumph of plutocracy). 1885 to 1893 (the beginning of the end). Price, paper, ^o cents ; cloth, $1.25. RAILROADS IN EUROPE AND AMERICA. An indispensable work for all persons interested in the railroad problem. It is a powerful and convincing argu- ment in favor of government control. This is a rather unusual subject to be treated of by a lady, but the author has done her work with thoroughness and ability. She considers one of the most serious questions of the times to be whether the railways shall own the people or the people own the railways. In discussing this question she first gives the rail- way statistics from official sources of the United Slates, Ger- many, Austro-Hungary, India, Victoria, England, France, and a number of other countries, with an explanation of the Zone System in operation in Austria and Hungary. For sale by all newsdealers, or sent postpaid by Arena Publishing Co., Boston, Mass. From the press of the Arena Publishing Company, Fiction : Social, Economic anb Beformatiue. Price, paper ^ ^o cents i cloth^ $1.25. E. Stillman Doubleday A story of the Struggles of Honest Industry under Present Day Conditions. Charles S. Daniel K Story of the Tran sf ormation of the Slums JUST PLAIN FOLKS. A novel for the industrial millions, illustrating two stu- pendous facts : — 1 . The bounty and goodness of nature. 2. The misery resulting from unjust social conditions which enable the acquirer of wealth to degenerate in luxury and idlenesaijiand the wealth producer to slave him- self to death, haunted by an ever-present fear of starva- tion when not actually driven to vice or begging. It is an exceedingly interesting book, simply and affectingly told, while there is a vast deal of the philosophy of commun- ism in the moralizing of Old Bat. All persons interested in wholesome fiction, and who also desire to understand the conditions of honest industry and society-made vice, should read this admirable story. AI Price, paper, 50 cents ; cloth, $1.25. A Social Vision. One of the most ingenious, unique and thought-provoking stories of the present generation. It is a social vision, and in many respects the most noteworthy of the many remarkable dreams called forth by the general unrest and intellectual activ- ity of the present generation. But unlike most social dreams appearing since the famous " Utopia " of Sir Thomas More, I this book has distinctive qualities which will commend it to many readers who take, as yet, little interest in the vital social problems of the hour. A quiet humor pervades the whole vol- ume which is most delightful. The brotherhood of man and various sociological and philan- thropic ideas, such as the establishment of a college settlement and the social regeneration of Old Philadelphia, are a few of the topics discussed in " Ai," a novel by Charles Daniel, who calls it " A Social Vision." It is alternately grave and gay; and the intellectual freshness reminds one constantly of Edward Everett Hale's stories, with which "Ai" has much in common. This is a clever book, and, what is much more important, one whose influence is for good. — Public Ledger. From the press of the Arena Publishing Company. Fiction : Social, Economic an6 Reformatiue. Hamlin Garland The great Novel of the present popular Industrial and Political uprising Emil Blum and Sigmund \lexander One of the most scathing Arraignments of conventional Hypocrisy ever Published Price, paper, ^o cents ; cloth, $1.25. A SPOIL OF OFFICE. This is a stirring novel of western life, and deals with the great movement known as the Farmers' Alliance. Entitled t» rank among the greatest of American novels. — Minneapolif Spectator. Radically unconventional, and doubtless the truest picture of Western life that has appeared in American fiction. — Commer- cial Advertiser, Detroit, Mich. A work which possesses a fascinating interest for the super- ficial reader, and many excellent suggestions for the thoughtful student of the economic questions of the day — a rare combi- nation. — Books and Notions, Toronto, Can. Price, paper, 50 cents ; cloth, $1.00. WHO LIES? An Interrogation. This is unquestionably the most vivid and realistic ex- posi of the sham hypocrisy and lies of conventional society which has appeared since the publication of Max Nordeau's " Conventional Lies of Civilization,'' which in- deed suggested the work. "Who Lies?" is written in story form, and is exceedingly interesting. This is one of the boldest, most radical and realistic works of the decade. It is unconventional as it is unique, and will un- questionably call forth criticisms in quarters where its shafts enter. — Illinois State Sentinel. One does not know what a rare thing the truth is until one is pledged for a whole week to tell " the truth, the whole truth, and nothing hut the truth." These gentlemen in their various callings who wager to tell the truth for a week lose friends and patronage from the word " go." Each mentally curses the day he took that fool pledge to tell the truth, and never before knew that he was a liar. The cor- ruption of modern society is shown up in its most revolting yet most realistic light. All this is admirably told in "Who Lies," a work published lately by the Arena Company, of Bos- ton. We know the work to be one full of plain, unvarnished truth, a single " lecture " on realism (delivered by the professor when under obligation to speak the truth) containing the essence of the modern social question and its solution. — Rich- mond Daily Telegram, Ind. For sale by the trade, or sent postpaid by The Arena Publishing Company.