5:27 re; j f $w^ CORNELL UNIVERSITV LIBRARY 3 1924 075 437 347 The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924075437347 In compliance with current copyright law, Cornell University Library produced this replacement volume on paper that meets the ANSI Standard Z39.48-1984 to replace the irreparably deteriorated original. 1995 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. AND HOW TO PROTECT AMERICAN INDUSTRY, BY KNIGHTS OF LABOR. PHILADELPHIA. PA.:D!SCAR[:!iED { I I Vf ' " Library ■i '^tiif-\ TO -"^ "^■■. ' ^' ' " ' THE UNMARRIED YOUNG WOMEN AND MEN OF THE UNITED STATES WHO DESIRE TO MARRY AND MAINTAIN HOUSEHOLDS, AND TO THE PRESIDENT OF THE UNITED STATES, AND TO THE SENATORS AND MEMBERS OF THE HOUSE OF REPRESENTATIVES IN CON- GRESS, THIS WORK IS MOST RESPECT- FULLY INSCRIBED BY THE AUTHORS, KS. OF L. Philadelphia, Pa., September ist, 1886, Copyright, 1886, by L. E. Ridgway. I O PREFACE. The National Bank Notes, so cheaply gotten out of the Treasury Department of the United States, create fictitious values that have so in- creased the cost of living, that the young women and men of the United States find it to be impossible to marry and maintain households at any reasonable cost; and the circulating medium is so limited in volume, as to force on the country the costly and dangerous system of buying and selling with time Notes, to be discounted by Bankers and Bill-Brokers, at the expense of wage-workers ; who by their labor produce all of the artificial wealth, and the means of paying all taxes, debts, and the interest on all money, due or loaned, which compels them to most respectfully request Congress to grant early relief, by the passage of the Bills printed in the Appendix to this work. THE AUTHORS, Ks. of L. Philadelphia, Pa., September ist, 1886. 19624 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 1. Q. What is the object and duty of Civil Government? A. The preservation of rights and the punishment of wrongs. 2. Q. How are rights to be protected and wrongs punished? A. By means of a code of laws. 3..^ Q. How are laws enacted for the protection of persons and prop- erty to be supported? A. By means of taxes levied and collected for that purpose. Taxes should be paid by persons According to their Means. 4. Q. May all persons be taxed an equal amount? \ A. Taxation to be just, must be levied upon persons according to their means. Those having most to be protected should pay the most to sup- port the laws which protect them and their property. The First Duty of Civil Government. 5. <2- To enable taxes to be paid and commodities to be exchanged, what is the first duty of any Civil Government? A. To establish by law a monetary system, to make money and put it into circulation by paying the current expenses of Government. Legal Tenders Only are Money. 6. Q. What is money? A. That which the law declares shall be a legal tender for all debts, dues and demands, public and private. The Two Subjects of the First Importance in the Organization of Civil Gov- ernment. 7. Q. What two subjects are of the first importance in the organiza- tion of any Civil Government? A. First, a monetary, and second, a system of taxation. What a "Bill of Credit" is. 8. Q. What is referred to in the Constitution of the United States as a "Bill of Credit?" A. A note promising payment in lawful money on demand, and spe- cially authorized by law to pass as a circulating medium, or as currency. The States have no Right to issue a "Bill of Credit." 9. Q. Are the States prohibited by the Constitution of the United States from issuing a "Bill of Credit?" A. They are. 6 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. No Power has been given to Congress to issue a "Bill of Credit." 10. Q. Have the States delegated to Congress any power to issue a "Bill of Credit?" A. No. Congress must make a Legal Tender Act. 11. Q. Have the States delegated to Congress the power to make a Legal Tender Act? A. Yes. It is made the duty of Congress to coin money and to regu- late the value thereof^ and of foreign coins, and as, no coin is money until it is made a legal tender, and as money cannot be made of equal value until all coins and U. S. notes are made equal legal tenders, it is the sworn duty of Congress to make a Legal Tender Act ; in order to make coins, and U. S. notes, money, and to make them equal legal tenders, to regulate the value thereof. -.^ . . , < .; • " t ■ The States may Make Gold and Silver Coins Legal Tenders. 12. Q. May the States make silver and gold coins — domestic and for- eign — legal tenders, or money ? , . , . A. They may. The States have no right to Lssue Legal Tender Treasury Notes. 13. Q. May the States issue State Treasury Notes, and make them legal tenders? - ■ , , A./Ro. .Because in making the Constitution of the United States they agreed that no State should make anything but silver and gold legal tenders. The States Delegated to Congress the Power to Lssue Legal Tender U. S. Notes. 14. Q. Did the States delegate to Congress the power to issue U. S. Notes or "Public Bills," and make them legal tenders? A. Yes. This power is included in the clauses of the Constitution which authorize Congress to coin and to borrow money, or to issue " Pub- lic Bills," and regulate the value thereof, to avoid the necessity of borrow- ing money. The power to issue U. S. Notes is therefore included in the clauses of the Constitution of the U. S. which empower Congress to bor- row money; to make money; and to regulate the value thereof, by a Legal Tender Act. Coins are not Money until made so by a Legal Tender Act. 15- Q. Does the mere act of coining silver and gold make them money? A. No. The Trade Dollar is a beautiful coin, but it is not money, and has not been since 1876; when Congress declared by law, that it should not be a legal tender. That is to say, it was in 1876 demonetized. The Reason why Money commands a Premium or Interest thereon. 16. Q. What makes a premium or high rate of interest on legal- tenders or money? THE OBJECT AND DUTY OF CIVIL GOVERNMENT. "J A. When the demand for them exceeds the supply. 17- Q- When the supply of full legal tenders is equal to, or greater than the demand for them, can they command a premium or a high rate of interest ? A. No. 1 8. Q. What enables legal tenders or money and Bills of Credit, or Bank Currency to be loaned on interest? A. Because the demand for them is greater than the supply. 19. Q. What law regulates the interest on money and on Bills of Credit or "National" Bank Notes? A. The law of supply and demand. 20. Q. When does the rate of interest on money and Bills of Credit increase? ' . . . , A. When the volume decreases and the demand increases. 21. Q. How can the rate of interest on money.be decreased? A. By making money so abundant that there would be more lenders than borrowers of money. 22. Q. Can Congress make more lenders than borrowers of money? A: Yes. Simply by issuing and putting into circulation enough legal tenders to enable the business of the entire country to be carried on with cash or legal tenders. Should the Sun go dmvn on the Wages of Labor? 23. Q. Does it oppress the laborer or wage-worker to let the sun go down on his wages unpaid? A. It does. Why Wage- Workers are not Promptly Paid. 24. Q. Would the laborer be kept out of his wages for thirty days, or even for a week, if the money which carries on business or employs labor, did not command any other interest or increase than what arises from its investment in labor? A. No. Every solvent or well regulated business concern could as easily pay the wages due at the end of the day as at the end of the week or month. Natural and Artificial Wealth. 25. Q. What is wealth? A. The natural wealth of a country consists in its lands, woods, water-courses, and minerals. The artificial wealth of a country is pro- duced by labor. How Artificial Wealth is Produced. 26. Q. What improves and makes valuable the natural wealth of any country ? A. Labor. THE OBJECT AND DUTY OF CIVIL GOVERNMENT. W/iai Employs Labor. 27. Q. What is necessary to the employment of labor? A. Money. The Motives of the Laborer. 28. Q. What motive prompts or induces any man or woman to labor? A. The first motive is to earn bread and clothing or the means of subsistence; and the second motive is to better their condition or increase in wealth. How the Wages of Labor are Regulated. 29. Q. What regulates the wages of labor ? A. Demand and supply. The Cash System of Business. 30. Q. What would make the greatest demand for labor? A. The cash system of business. 31. Q. Why would the cash system of business increase the demand for labor? A. Because money invested in wealth-producing labor would pro- duce a greater increase or rate of interest than any other investment. 32. Q. How iilay the cash system of business be established? A. By paying off the United States Bonds overdue or now payable, and by going into the market and purchasing at their market value, those not now due. Money should constantly Increase. 33. Q. Should the volume of money be increased as the population and business of the country increase? A. It should. How tlte Volume of Money may be Increased. 34. Q. As the high power or prerogative of making money is delegated to Congress, how may it increase the volume of money when the public debt is paid off? A. By suspending taxation and by paying the daily expenses of the Government of the United States in an issue of full legal tenders or money, to maintain the cash system of business; and when this object is accom- plished, let taxation be resumed. The Effect of Less Taxation. 35. Q. Would not the suspension of taxation injure the laboring man? A. No; because it would cheapen the cost of producing and of living; that is to say, it would cheapen the cost of doing business and in- crease the net profits of money invested in wealth-producing labor, and thus protect or benefit laborers. A High Tariff not Necessary. -36. Q. Is it not true that high taxation or a high tarifif on imported goods is necessary to protect capital that employs American labor? THE OBJECT AND DUTY OF CIVIL GOVERNMENT. Q A. It is not true; because any taxation is so much addition to the cost of doing business and of living; and one cent of taxation beyond the amount of money necessary to defray the expenses of the Government of the United States economically administered decreases the profits on money invested in labor, and the net vkfages of labor. Labor provides all the means of paying taxes, debts, etc. T/ie Cask System Necessary to Protect American Industry. 37. Q. Can the manufacturers of this country successfully compete with foreign manufacturers, under a revenue Tariff; and if so, how? A. By establishing the cash system of business, which would dis- pense with time notes or commercial paper, which cost the capital and labor employed in wealth-producing, millions upon millions annually, to have them discounted by Bankers and other dealers in forced credit ; all ol ■ which labor must earn the means of paying; and it is therefore an unneces- sary burden upon such capital and labor. Who Oppose the Cash System of Business. 38. Q. Who are the determined opponents of the cash system of busi- ness? A. Bankers and all money lenders or persons who deal in forced credit; as by discounting time notes or commercial paper, they obtain an increase of their wealth; and avoid most of the risks caused by the forced credit system of business. Two Kinds of Banks. 39. Q. How many kinds of Banks are there? A. Two; Banks of Discount, Deposit and Exchange, and Banks o Issue. An Honest System of Banking. 40. Q. May Banks of Discount, Deposit and Exchange be prohibitec by law? A. No. Every person has as much right to engage in such bank ing as in merchandising or in any other lawful business. A Fraudulent System of Banking. 41. Q. What is a Bank of Issue? A. It is an institution specially authorized by law to issue its Note; not bearing interest and promising payment on demand in lawful money which are exchanged for the Notes of individuals promising payment ii lawful money, in 60, 90 or 120 days or at some future time and place, namec in said notes at a certain rate of interest, which must be paid at the time o the exchange. The Notes of the Bank are mere evidences of debts due bi it to the public, on which it draws interest in advance, instead of paying in terest thereon to the public. ■' 42. Q. Are not the notes of a Bjink of Issue, Bills of Credit? A. They are. lO THE OBJECT AND DUTY OF CIVIL GOVERNMENT, No Power to Issue a Bill of Credit. 43. Q. Does not the Constitution of the United States prohibit the States from, emitting or issuing Bills of Credit? A. It does. 44. Q. Has any power been delegated to Congress to issue a Bill of Credit or to authorize any one to do so? A. No. No Necessity for Banks of Issue. 45. Q. As Congress has the power delegated to it to issue " public bills" or U. S. Notes, instead of borrowing money, and of making them and coins of equal value, by making them equal legal tenders or money, is it necessary to confer on individuals the power to establish Banks of Issue in order to issue and circulate Bills of Credit, mere evidences of debts due by them to the -public, on which interest must be paid, by the public; and which cannot be paid until labor produces the means of its payment ? A. It is not necessary,, and there is no Constitutional provision which authorizes such Notes to be issued, and circulated. They are a gross fraud on the public. " No natural Conflict between Wealth Producing Capital and Labor. 46. Q. Is there any natural or necessary conflict between capital employed in wealth-producing industry and labor ? A. Certainly not. They are mutually dependent upon each other. They have a common interest and should in all things act together. Proof of a Conflict of Interest between the Wealth and Non-Wealth-Producitig Capitalists. 47. Q. Is a conflict necessary between the interests of capital employed in wealth-producing industry, and of capital used by the non-producers of wealth ? A. Certainly there is. The capital of the non-producers of wealth can only be increased at the expense of capital employed in wealth-pro- ducing and of the hand and skilled laborers or bread-winners. 48. Q. Can this be proven by figures and facts? A. It can. There are over two thousand "National" Banks of Issue. Count the salaries and wages of the persons employed to do the business of these Banks. Then count the interest on the business paper or commercial notes discounted annually by these unconstitutional and useless institutions, and it will amount to an enormous sum of money, all of which is a useless indirect tax on the wealth-producing capital and labor of the country. Then count the cost of the periodical contractions of money and currency of the country, produced by Banks of Issue, to enable them to increase the demand 'for money and currency and the consequent increased rate of interest on money, and to more rapidly concentrate the increased wealth of the country in the hands of the non-producers of wealth, or of those who never invest a dollar in wealth-producing labor; and finally. THE OBJECT AND DUTY OF CIVIL GOVERNMENT. II count the loss to the country from the suspension or stagnation of the wealth-producing industries, by these periodical contractions of the money and currency, and the decrease in the consumption of the various products in consequence thereof, and .the capitalists who employ their means in wealth-producing and the wage-workers or bread-winners will see, that they are in the abject condition of, serfs, at the mercy of those who invest their means in Banks of Issue, and of others, who employ their capital or means in the accumulation of the wealth produced by others. The Cash System of Business against the Forced Credit System. 49. Q. With enough full legal tenders or money in circulation to enable the business of the country to be done with cash, instead of doing it with tirne notes or commercial paper, to be discounted by bankers, and money lenders -generally, could any -money panic or crash be produced? A. No. To "pay as you go" is to be out of debt, and to be "out of debt" is to be ^"out of danger." No money panic or commercial crash could be produced under such circumstances. ' . Why the C(ish System of Business is, of posed by Bankers. _ 50. Q. Would not the cash system of business make banking less profit- able, and force much capital now employed in this way into the employ- ment of wealth-producing industry, in order to get a higher rate of interest or increase on it? : A. It would have that effect. Demand and Supply regulate the Wages of Labor. ^\. Q. Would an increased demand for labor increase the wages of labor ? ^.. It would. When the Demand for Laborers exceeds the Supply, Labor will cominand the Highest Wages. $2. ■ Q. What would produce the highest possible rate of wages for labor ? A. By. producing such a state of wealth-producing business activity as to make the demand for laborers exceed the supply. Uozv the Demand for Laborers may be m.ade to exceed the Supply. 53. Q. How may the. demand for laborers in wealth-producing be made to exceed the supply? A. By prohibiting the issue and circulation or use of bank currency, and compelling bankers to discount time-notes or commercial paper in legal tender coin and U. S. Notes, and by putting, enough; money into cir- culation to enable the business of the country to be done with cash ; then bankers and all money lenders and dealers in forced credit would find it to be to 'their advantage to invest their money in wealth-producing industry, which would give them more interest on their money, than by employing it in 12 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. any other way , which would make the demand for wealth-producing laborers exceed the supply. The good Effects of Destroying Bank Currency. 54. Q. Would the prohibition of Banks of Issue and the establishment of the cash system of business destroy the conflict of interest between the wealth and non- wealth-producing capitalists which now exists? A. It most certainly would; and with the control of Congress over the volume of money, which controls the business of the country, no con- traction of the volume of money, by putting it into interest-bearing Bonds, for labor to produce the means of paying uselessly, would be attempted by the representatives of the wealth-producers, if the latter are true to their own interests. Abolish Banks of Issue to establish the Cash System of Business afid end a Cotiflict. 55. Q. Would the cash system of business once fairly established render powerless those who oppose an expansion of legal tenders or of money as business increases? A. It would; and in a short time it would end the conflict on this subject. The Amount of Money required to establish the Cash System of Business. 56. Q. What amount of legal tenders or money is required to establish the cash system of business? A. In 1866, we had two thousand millions or two billions of dollars of money and currency in circulation in a portion of the States, which did not quite enable the business in those States to be done with cash. Eleven States of the South were then without any considerable amount of circu- lating medium or money, and they required at least a thousand millions or a billion of dollars more. That is to say, the entire country in 1 866, could have advantageously used three billions of dollars of legal tenders, or of money. Now calculate the enormous increase of business throughout the country since 1866, and some idea can be formed of the volume or amount of money now required. Too much Money cannot be put into Circulation. 57- Q- Can there be too much money issued and put into circulation? A. No. A full legal tender, or money, not made redeemable in other money, but obtaining the only redemption it requires by paying taxes and debts, and in purchasing commodities, and in making the exchange of commodities, never can become a depreciated money, no matter what the volume of it may be. Bank currency promising redemption on demand, in "Greenbacks" or coin, is useless, costly and dangerous. We can have too many promises to pay in lawful money in circulation. Why some Persons think that too much Money may be put into Circulation. ■ 58. Q. What gave rise to the idea that money must be limited in amount? THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 1 3 A. The use of Bank Currency, mere evidences of debts due by bankers to the public, specially authorized to pass as a circulating medium or currency, promising payment on demand in lawful money, when the issuers of them had no lawful money with which to redeem them, and never expected to have, and the oft repeated failure to redeem such currency has given rise to the erroneous impression, that legal tenders or money — not made redeemable in other money — should also be limited in amount or volume; and because bankers and dealers in forced credit prefer commer- cial paper to the cash system of business. The Amount of Bonds sold from March ^ih, 1861, to February 2jd, i86j. 59. Q. What amount of U. S. Bonds had been issued to carry on the Civil War of 1861-65, when the "National" Bank Act was passed in 1863? A. Only 25 millions of dollars out of II500 millions, which had been authorized on February 25th, 1862, to be issued and sold, had been dis- posed of on February 25th, 1863, when the U. S. Bank Act became a law. An Issue of U. S. Bonds was not Necessary to Carry on the Civil War. 60. Q. Was it necessary to issue U. S. Bonds to carry on the Civil War? A. No. The legal tender U. S. Notes were bonded to establish the "National" or U. S. Banks. The Bonds could have been Paid at Maturity. 61. Q. Could the Bonds have been paid off as they matured, or became payable ? A. They could. Bonds Refunded to Perpetuate the National Banks. 62. Q. What was the object of refunding the U. S. Bonds, bearing in- terest, which labor has to provide the means of paying, when they could have been paid at maturity, or when payable? A. In order to continue the "National" Bank system of currency. Tlie Cost of National Bank Notes. 63. Q. What do the "National" Bank Notes, which are equal legal tenders for all public debts, dues, and demands, with U. S. Notes, popularly known as "Greenbacks," cost the Bondholders, as Bankers, to get out of the Treasury of the United States? A. Nothing. On the contrary, the Bondholder deposits his Bonds as security for the loan of these Notes, and gets 90, 80, 75 or 60 per cent. of the face value of his Bonds, and is paid the interest on the Bond, with exemption from taxation on his Bond, for taking the loan of this currency to bank on and speculate with, made redeemable in " Greenbacks." What it Costs to get U. S. Money out of the Treasury. 64. Q. Can any person get a dollar of silver, or of gold, or of " Green- backs," out of the Treasury, without paying lOO cents on the dollar for it? A. No. 14 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. W/iai may justly be called Clicap Money. 65. Q. As the Bondholder pays nothing for his dollars of legal tender "National" Bank Notes, is it not to him cheap currency, although v^.f/'/y to the public, and does it not create false values? A. It is cheap currency to the Bondholder as a Banker, and as it costs nothing, it is fictitious, and creates /alse values, and thereby requires those who have to pay 100 cents to the Treasury of the United States for their dollars, to earn at least $2, to do what $1 should do, and formerly did. National Bank Notes create Fictitious Values. 66. Q. Does not this "National" Bank Currency, .f^c/z^a/ and profitable to the Bondholder as a Banker, so increase the cost of doing business and of living, by creating fictitious values, as to render it more difficult for labor- ing men and women to earn a living? A. It does. It is almost impossible for laborers to earn a decent living, with a fictitious currency in use, thereby creating false values.' No Money or Currency should go out of the Treasury for less than 100 Cents paid for each Dollar. 6"/. Q. Should any.money or currency be paid out of the Treasury to any person or persons for less than icjo cents on the dollar? ■ , A. Justice requires, that all persons should pay the same amount for their dollars, that all money and currency should cost the same amount for the dollar, that all money and currency may be real, in order to produce real values, and that all persons may obtain in exchange for their dollars the same amount. This would put all purchasers ' in the markets on an equal footing.' - . ■ The Federal System of Money. . 68. Q. What is the Federal Government or United States system of money? A. The decimal system ; in which the dollar is the unit of -money, divided into half-dollars, quarter-dollars, dimes, half-dimes, cents and mills. Tlie Term Dollar does not cofivey any idea of Quantity. 69. Q. Does the term dollar convey any idea of quantity? A. The dollar is a mere term, conveying no idea of quantity. How the Quantity contained iti a Dollar is Ascertained. 70. Q. How do we ascertain the quantity contained in a dollar? A. By a reference to the law which fixes a unit of value for the dol- lar; the money of account and contract. The Coinage Acts from iyg2 to iSyj. 71. (2. What was fixed as the unit of value by Congress in 1792? A. The dollar of account and contract from 1792 to 1873 contained y/i% grains of pure silver. All of the U. S. Bonds issued from 1792 to 1873, were made payable in dollars, equal to 37 r^ grains of pure silver. THE OBJECT AND DUTY OF CIVIL GOVERNMENT.' 1 5 The alloyed silver dollar, from 1792 to 1837, was 416 grains. One-twelfth part was alloy. The Coinage Act of iyg2. 72. Q. Did the coinage Act of 1792 fix the number of grains of pure or 24 carat gold in the gold dollar? A. It did. It contained 245^ grains of pure or 24 carat gold, or 27 grains of alloyed or standard gold, 22 carats fine. An ounce of gold was made by this Act worth 15 ounces of silver. In Europe an ounce of gold was worth in market 15 J^ ounces in silver. This drove gold to Europe to get the premium of one-half of one ounce. Silver and gold coins by this Act were made equal legal tenders for all dues and demands, public and private, to an unlimited amount. How Gold was Restored to Circulation in 18J4.. 73. Q. To restore gold to circulation in the United States what did Congress do in 1834? ^. It changed the Coinage Act of 1792, so as to make the gold dollar contain 23^9 grains of pure, or 24 carat gold; or 253^ grains of alloyed, or : standard gold, 22 carats fine. When these gold coins were worn light, or less than their full legal weight, they were thrown into the scales and weighed, and estimated at their market value, and the owner had to suffer a loss.. All gold coins issued under the Act of 1792, were by this Act made full legal tenders at 98^^^ of a cent per pennyweight. r-_ The -Cpinag£ Act- of i8^y, :\- 74^1 "(2.' What changes were, made by the Coinage Act of 1837? Congress in 1837 made the gold coin nine parts fine, and one part alloy, which made it 18 carats fine. It contained 23^2^2^ grains pure, or 24 carat gold, or 25^ grains of alloyed or standard gold. This overvalued gold and undervalued silver, which increased the circulation of gold, by bringing it back from abroad, and decreased the circulation of silver, as it went abroad, to get the premiurn on it. The pure silver in the dollar was continued at 37 ij^ grains, but the alloyed silver dollar, composed of 10 parts — 9 parts fine silver and one part alloy — made the alloyed or standard silver dollar to contain 412^^ instead of 416 grains of alloyed silver. The Coinage Acts of j8^g and of 18^1. 75. Q. What did Congress do by the Coinage Act of 1849?. r A. It authorized a twenty-dollar gold piece, or double eagle, to be issued. 76. Q. What did Congress do by the Coinage Act of 185 1 ? A. It authorized a three cent silver coin to be issued, composed of 5^ parts of silver and ^ part of copper, and made the alloyed weight of the piece 12^ grains, and limited its legal tender power to 30 cents and .under. This was the^r.J^Act that limited the legal tender power of any silver coin. It was done by a Congress under the control of the bank currency party. l6 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. The Coinage Act of i8jj decreased the Silver in the Fractional Coin. 77- Q- What did Congress do by the Coinage Act of February, 1853? A. It authorized the coinage of a three dollar gold piece, of the alloyed weight of the gold dollar of 1837. It decreased the alloyed or standard weight of the silver half-dollar to 192, instead of 2063^ grains of the silver half-dollar of the Act of 1837; the quarter- dollar, the dime and half-dime were by this Act made respectively one-half, one-fifth and one- tenth of the alloyed weight of the half-dollar of 1853. The fractional silver coins were prohibited from being legal tenders for any amount over five dollars. This also was the act of the Bank Currency party, after it had been defeated at the November election of 1852; and to stop the circulation of silver dollars in the United States, this Congress did not make any provision for their coinage, although the silver dollar was the unit of value for all dol- lars. This was done on the eve of the expiration of its power in Congress. This Act authorized bars and ingots of gold and silver to be cast of not less weight than ten ounces. It further authorized pieces of one, two, three and five ounces to be cast, with the standard fineness and weight stamped upon them ; but they were not made legal tenders, or money, as they should have been. It prohibited any silver bullion from being coined for any per- sons into light weight or debased silver coins ; debased by this Act. The persons who debased fractional silver coin, and first limited their legal tender power and usefulness, are now denouncing them for not being of the weight or commercial value of 100 cents or parts thereof. The Deficiency Act of 18^ j. 78. Q. What did Congress provide for in the Deficiency Act of March 3d, 1853, on its last day of power? A. It enacted that silver and gold bullion might be cast into bars or ingots on the demand of the owners, which were not made legal tenders or money; and that the three cent piece authorized to be issued by the Act of 1851, should also be debased to the weight of three-fiftieths of the weight of the half-dollar of 192 grains of alloyed silver of the Act of Feb- ruary 26th, 1853. This Act of March 3d, 1853, was to take effect on April 1st, 1853. Foreign Coins not Money after February, 185 j. 79. Q. What remarkable Act was passed by Congress on February 2 1 St, 1857, in relation to foreign coins? A. On February 21st, 1857, Congress passed an Act "relating to foreign coins and cents." This Act provided that the quarter, eighth, and sixteenth of the Spanish pillar dollar, and the Mexican silver dollar should be receivable by the United States at the rate of 20 cents for the quarter of a dollar, and the real ox one-eighth of a dollar at 10 cents, and the media, half real or sixteenth of a dollar at 5 cents. It prohibited them from being paid out; but required them to be received and be destroyed, since which time none have come into the United States. This Act repealed all Acts THE OBJECT AND DUTY OF CIVIL GOVERNMENT. I7 which made foreign gold and silver coins legal tenders or money in the United States. The Money of one Country does not pass as Money in any other Country. 80. Q. Does not the money of one country pa.ss as money or legal tenders in any other country? A. No. The money of one country does not pass as such in any other country, unless it is especially declared by law to be a legal tender in that country or Government. There is no such thing as money of the world; nor is it probable that there ever will be. Silver £|Sid gold coins, when they pass from one Government to another, are treated as bullion; they are thrown into the scales, and pass by wefght at their market value per grain, of pure silver, and 24 carat gold, contained in them. The Coinage Act of 1865. 81. Q. What was done by the Coinage Act of 1865? A. On March 3d, 1865, Congress passed an Act to do away with the silver 3 cent coin, and substituted therefor a 3 cent piece composed of nickel and copper, not to exceed one-fourth part of nickel, the alloyed or standard weight of which was fixed at 30 grains ; it was made a legal tender to the amount of 60 cents and under. It also made the one and two cent coins legal tenders for four cents and under, and repealed all Acts in conflict with this Act. The Coinage Act of 1866. 82. Q. What was done by the Coinage Act of 1866? A. On May i6th, 1866, Congress passed an Act which authorized and required a 5 cent nickel piece to be coined. It was made of tiickel and copper of the alloyed weight of TJy^ grains, one-fourth part of nickel metal; they were made legal tenders for ^i and under; they were made redeemable in sums of ^lOO. The 5 cent nickel coin contains less than 7 mills of commercial value. The Coinage Act of iSjJ. 83. Q. What was done by the Coinage Act of 1871 ? A. On March 3d, 1871, Congress passed an Act, which made all copper, bronze, copper-nickel, and base metal coins of any kind, authorized by law, redeemable in lawful money, when presented in sums of ^20. This was another unnecessary Act, in base subserviency to the interests of dealers in money and Bank currency. All money redeems itself by use. The Coinage Act of 18'/ j. 84. Q. What was done by the Coinage Act of 1873 ? A. On February 12th, 1873, Congress passed an Act "revising and amending the laws, relative to the mints, assay offices and coinage of the United States." It left gold coins of the alloyed or standard weight of the gold coins of the Act of 1837. It made 251,^ grains of alloyed or standard gold the unit of value for all dollars, to increase the value of the U. S. l8 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. Bonds, payable principal and interest in coin, as there was then a premium of one-eighth of a dollar on gold, the only coin then in circulation, and the only money receivable for duties on imports. There being a demand for money to pay custom house duties one-eighth greater than the supply in 1873, made a premium on gold equal to one-eighth of a dollar. It was a cunningly devised scheme to enrich a few at the expense of the mass of the people. The value of all bond dollars by the contract, under which they were issued, was equal to 371 ^ grains of pure, or 412^^ grains of alloyed or standard silver dollars. The coinage of the old silver dollar was prohibited by this Act. It authorized the coinage of the Trade dollar of the alloyed weight of 420 grains, and limited its legal tender power to ^5. The frac- tional coins of base w/^/a/ were made a legal tender for 25 cents and under. It also made gold coins, when worn light, a legal tender by weight, at a proportional value, the loss to be borne by the holder of the coin. It authorized gold and silver bullion to be cast into bars and ingots of not less than five ounces of the alloyed or standard weight at the request of the owners of bullion, who were to pay a charge of one-fifth of one per cent, for coining gold bullion ; and the charge for coining silver bullion into Trade dollars was to be fixed from time to time by the Secretary of the Treasury. It took effect on April ist, 1873. An Act to Destroy "Greenbacks'' and to Issue more Bank Notes, called A Resumption Act. 85. Q. When did Congress pass an Act to destroy legal tender U. S. Notes? A. Gn January 14th, 1875, Congress passed an Act for the destruc- tion of legal tender " Greenbacks," and of the fractional legal tender U. S. Notes, and to issue in lieu thereof light weight fractional silver coins. It repealed so much of the Act of 1873, as charged one-fifth of one' per cent, for converting gold bullion into alloyed or standard coin, which made the coinage of gold bullion free, and as a grain of 24 carat gold is worth about four cents a grain, and as there are only 23^^ grains of 24 carat gold in a dollar, the market value of the gold dollar is a little over 92 cents, whilst its value by law is 100 cents. This enables the owners of gold bullion to get 100 cents for less than 93 cents worth of bullion; enabling them to make over 7 cents on each dollar. Silver bullion is bought by the United States at its market value, and coined by the Government, and as 371 X grains of pure silver are not now worth 100 cents in market, the whole body of the people get the advantage of coining 371 J^ grains of pure silver into a dollar, worth lOO cents in law. This Act repealed the limit to U. S. Bank Notes, and authorized Bond- holders to obtain a loan of 90, 80, 75 or 60 per cent, of the face value of their Bonds, to an unlimited amount, to bank on and speculate with, by de- positing Bonds as security for the loan, being paid the interest on the Bond and exemption from taxation for taking the loan. By this Act, 80 per cent, of the legal tender U. S. Notes were to be destroy ed,.2.s fast as U. S. Bank Notes were issued Xo that amount; which is a very significant fact, and evi- THE OBJECT AND DUTY OF CIVIL GOVERNMENT. I9 dence that U. S. Bank currency and U. S. Notes are antagonistic to each other. This Act also provided, that after January ist, 1879, U. S. Notes should be redeemed in coin at the Office of the Assistant Treasurer of the U. S., at New Yo7-k, in sums of$^o; in order to destroy them; in the interest of U. S. Bank currency. To carry out this unjust scheme, the Secretary of the Treasury was authorized to borrow coins on an issue of U. S. Bonds, bearing 5, 4^ and 4 per cent, interest, for labor to earn the means of pay- ment, in order to destroy legal tender U. S. Notes, not bearing any interest. Specie Pay^nents Have Not been Resumed. 86. Q. What was this Act of 1875 called? A. It was called an Act to restore specie payments. 87. Q. Are the U. S. Banks required to redeem their Notes in specie on demand? A. They are not. Greenbacks are Not Promises to Pay oti Demand in Specie. 88. Q. Were, or are the U. S. Notes or " Greenbacks " promises to pay on demand in specie? A. They are not. They are money, as they are legal tenders for all debts, dues and demands, public and private, except for custom house duties, and in payment of the interest and principal of the U. S. Bonds; they redeem themselves by use.. The Effect of More U. S. Bank Notes. 89. Q. What effect did the unlimited issue of " National " Bank Notes have on the business of the country? A. It increased the power of the Bondholder as a banker to control the business of the country, and to make wealth-producing capitalists and laborers pay tribute, to, or maintain the bankers and their employees. The Coinage Act of 18 J^. 90. Q. Did Congress on March 3d, 1875 pass a coinage act? A. It authorized the issue of a 20 cent piece; made a legal tender or money for $^ and under. It contained only 77 iV(i''q grains of alloyed silver. A Further Act to Destroy V. S. Notes and Trade Dollars. 91. Q. What Act did Congress pass on April i6th, 1876, under the pre- text of carrying out the pretended Resumption Act of January 14th, 1875. A. It passed an Act to require an issue of light weight fractional silver coins, to be exchanged for fractional U. S. legal tender Notes; which were to be destroyed. 92. Q. Did Congress on July 22d, 1876, pass a joint resolution to de- stroy legal tender U. S. Notes, and Trade dollars? A. Congress on July 22d, 1876, passed a joint resolution to autho- rize the Secretary of the Treasury, if he should see proper to issue, fractional silver coins, not to exceed Ten millions of dollars, in exchange for an equal 20 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. amount of legal tender Notes ("Greenbacks"), and prohibited said Notes from again being paid out until a like amount o{ fractional legal tender Notes, were received for dues to the U. S., and destroyed. It also prohibited the Trade dollar from being a legal tender, which left no silver coin a legal tender, but the light weight fractional coins. It further authorized a purchase of silver bullion not to exceed Fifty millions of dollars and the coinage of a like amount of light weight fractional silver coins. The bullion was to be purchased at its market price, with any money in the Treasury. The Coinage Acts of i8y8. 93. Q. Did Congress in 1878 pass a coinage act, to again make the original silver dollar a legal tender? A. In February, 1878, Congress passed an Act requiring the coin- age of the original silver dollar of 1792, and of 1837, containing 371 5^ grains of pure silver, or 412 J^ grains of alloyed or standard silver. It re- quired not more than Four millions, and not less than Two millions of dol- lars per month, to be coined. This Act again made this silver dollar a full legal tender, to an unlimited amount. Hayes was the President in i8y8. 94. Q. Who was President when this Act was passed ? A. Hayes was President; and vetoed this Act. A Coinage Act Passed over the Veto of 18 j8. 95. Q. Did Congress pass this Coinage Act over the veto? A. Congress on February 28th, 1878, received the veto message and immediately passed this Act -over the veto by the votes of over two-thirds of the members of the House. The Senate on the same day also passed it by the votes of over two-thirds of the Senators. The Detnocratic Party Controlled Congress in i8y8. 96. Q. What party had a majority of Senators and members of the House in 1878? A. The Democratic party. Tlie Men who Aided the Democrats in 1878. 97. Q. Who aided the Democratic majority of the Senate and House in passing this Act over the veto? A. Members of the Greenback-Labor party, and some representa- tives who were genuine Republicans in principle.' The Democrats who Opposed the Party in i8y8. 98. Q. Did any pretended Democrats of the Senate and House vote to prevent the passage of this Act, and also to sustain the President's veto? A. They did. They were not originally Democrats. After the Whig party was broken up, they came into the Democratic party, with their Bank Currency principles; to which they adhered in 1878. 'They were not trustworthy Democrats. THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 21 A Twenty Cent Piece prohibited in May , i8j8. 99. Q. Did Congress pass an act on May 2d, 1878,10 prohibit the coin- age of the 20 cent piece of silver? A. It did. The further Destruction of U. S. Notes prohibited in i8y8. 100. Q. Did Congress on May 31st, 1878 pass an Act forbiddittg the further retirement and destruction of U. S. Notes or " Greenbacks? A: It did. This Act prohibited the Secretary of the Treasury or other officers under \x\vn,from cancelling or retiring any more " Greenbacks" and it required all of said legal tender U. S. Notes, when received into the Treasury, under any law, or from any source, to be re-issued and to be again paid out, and kept in circulation. This Act defeated the main purpose of the pretended Resumption Act of January I4.th, 18 jj. The Election of a Majoidty of Democrats to Congress prevented the Destruction of U. S. Notes. loi. Q. If the people had not turned out the Bank Currency party and elected a majority of Democrats to Congress, in 1878, opposed to Banks of Issues, would not the legal tender U. S. Notes or "Greenbacks," have been destroyed, under the pretended Resumption Act of i8y^f A. They would. There is no safety for the rights of the people ex- cept by electing a majority of Anti-Bank Currency men to Congress, and in keeping such men in control of Congress. What is meant by Specie Payments. 102. Q. What is meant by an Act to resurne Specie payments? A. The State Banks of Issue which existed in 1861 and in 1862, suspended specie payments on December 31st, 1861, and in so doing locked up from their creditors the specie in their vaults, and snapped their fingers in the face of the public, that held their notes, promising payment on demand in specie. In a word they defied all law, and assumed to do as they pleased. Instead of paying their obligations with the specie in their vaults, they speculated with it. Specie Basis is a Delusion and a Fraud. 103. Q. What is meant by the specie or gold basis system of Bank currency? A. The State Banks of Issue were authorized by law, to issue ^3 in paper, promises to pay on demand in specie, for each dollar of specie in their vaults, as a basis for the Bank currency in circulation, to give the public confidence in it, and to enable these promissory Notes — mere evidences of debts due to the public — to freely circulate. Each of the three persons holding ^i of such currency deluded himself with the idea that there was $\ in the vaults of the Banks to pay him on demand in specie. This was the confidence game played to perfection. •- One Dollar in Specie cannot redeem, three or four Dollars of Paper. 104. Q. Could ^i of specie basis possibly redeem $'i^ of promissory Notes 22 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. in circulation, and if not, what was the real value of each $i note, supposing the Bank really had the lawful basis in its vaults? A. Each $\ note was worth in reality to the holder of it only 33 J cents for which the Bank got $1 and the interest thereon, for every moment the Note was in circulation. How Specie could have been restored to Circulation at any time. 105. Q. How could Congress have restored specie to circulatiori in 1875, or at any time after the Banks of Issue suspended in 1861 ? A. Simply by issuing plenty of legal tender U. S. Notes, receivable for duties on imports and for all other public dues, debts and demands and for all private debts, dues and demands, and by allowing all persons to deposit specie or coin with the U. S. Treasurer, in exchange for full legal tender U. S. Notes; and by further making coin and these Notes inter- changeable with each other by the Treasurer and Assistant Treasurers of the U. S., which system would have enabled persons having coin contracts to fulfill, to obtain the coin to do so, at par with full legal tender U. S. Notes. Bank Currency is Unnecessary and "Specie Basis" is a Fraud. 106. Q. Is Bank currency necessary, and is the "specie basis" system, to give confidence in Bank currency, a fraud on the public? A. Bank currency is not necessary to the business of the country'; it is a fraud on the public, and the specie basis system for such currency is a "sham and a delusion." "History is Philosophy, teaching by example;" or, " Experience is the best teacher." Certificates of Deposit in 186 j and iSyS. 107. Q. Did Congress in 1863 and in 1878 authorize an issue of Certi- ficates of Deposit? A. Congress on March 3d, 1863, "to provide the ways and means for the support of the Government" authorized a deposit of gold coin and of gold bullion in sums of not less than twenty dollars, in exchange for Certificates of Deposit, which were made legal tenders /«' duties on irnports. The moment these Certificates were paid in for duties at the custom houses, they became the property of the United States, which made the deposits of gold coin and bullion, a perpetual loan to the Government, without interest. In this way, Congf-ess, at any time, can get into the Treasury all the coin in the country. Congress, in February, 1878, authorized a deposit of not less than ten dollars in silver dollars of 412^ grains of alloyed silver in exchange for Certificates of Deposit, made legal tenders "for customs, taxes and all public dues" and when so received, they were to be re-issued. The moment they were received for dues to the Government, they became the property of the United States. They should have been made legal tenders for all debts, public and private. THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 23 Tlie Lesson taught by the Use of Certificates of Deposit. loS. Q. What useful information do we obtain from the use of these Certificates of Deposit? A. We learn from these deposits of coin and bullion, in exchange for legal tender Certificates of Deposit, that the United States can always obtain gold and silver coin and bullion in exchange for U. S. Notes made legal tenders for public and private debts, dues and demands, to meet any obligations of the United States, payable in coin, or to use for any other purpose. The History of Legal Tender U. S. Notes, Popularly Known as "Greenbacks." From 1812 to 181 5. The First Issue of Legal Tender U. S. Notes. 109. Q. When were legal tender U. S. Notes first issued? A. Congress, on June 30th, 1812, first issued U. S. Notes, and ■made them legal tenders for all public dues, including -duties on importations. They were not payable on demand in coin, but were made convertible into U. S. Bonds. Congress, on February 25th, 1813, and on March 4th, December 26th. 18 14, and February 24th, 1815, authorized further issues of legal tender U. S. Notes, convertible into U. S. Bonds. A U. S. Bank again Chartered in 18 16, and U. S. Note destroyed in 1822. no. Q. Did Congress in 1816 again charter a U. S. Bank? A. On April loth, 18 16, Congress, for a second time, chartered a U. S. Bank, with power to issue Bank Notes or "Bills of (lr&d\t"inade legal tenders for all public dues, and it made these bills of the Bank payable on demand in coin; and as the legal tender U. S. Notes conflicted with the Bank Notes, which were mere evidences of debts due by the Bank to the public, on which the Bank drew interest, it induced Congress, in 1817, to prohibit the further issue of legal tender Notes, and it required them to be destroyed, 2S fast as they were received into the Treasury. On May 3d, 1822, Congress prohibited these Notes from being a legal tender, in order to compel them to be bonded. Congress again authorized an Issue of U. S. Notes in 18 jy, and in 1842. 111. Q. When did Congress again authorize an issue of legal tender U. S. Notes, and why was it done ? A. Congress on October 12th, 1837, January 31st and August 31st, 1842, authorized an issue of legal tender U. S. Notes, to relieve the people from the panic and crash of 1837, caused by the contraction of Bank currency and the failure of the Banks to redeen: their promises to pay their debts on demand in specie. The Democrats in 18 ■^y in favor of U. S. Notes. 112. Q. Did Senators Benton, Csdhoun, arid all other Democratic Sena- 24 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. tors, vote in 1837 for the issue of legal tender U. S. Notes, not bearing interest, and convertible into U. S. Bonds? A. They did. The Advocates of Bank Currency oppose U. S. Notes in i8jy. 113. Q. Did the Anti-Democratic Senators in 1837 advocate U. S. Bank currency, and oppose an issue of U. S. Notes, made legal tenders for public dues ? A. They did. A U. S. Bank again Chartered in 1841. 1 14. Q. Did the Anti- Democratic party, after it came into power on March 4th, 1 841, charter a U. S. Bank? A. It did. The Act was vetoed by President Tyler. The Anti-Democrats Compelled to Issue U. S. Notes. 115. Q. Was the Anti-Democratic or Bank Currency party in Congress compelled in January and December, 1842, to authorize an issue of legal tender U. S. Notes ? A. It was. The Banks had suspended payment of their debts, payable on demand, and to relieve the distress occasioned by the Banks contracting the circulating medium, a further issue of U. S. Notes was author- ized by Congress; they were issued for a limited time and were then bonded. The Bank Currency Party in 1841 Repealed the Independent Treasury Act. 116. Q. When the Anti-Democrats came into power in 1841, what did they do with the Independent or Sub-Treasury Act of 1840, which made it felony to deposit any public moneys in a Bank; or to receive any money into the Treasury but legal tender U. S. Notes, and coin? A. They repealed it. The U. S. Treasury again made Independent of the Banks and U. S. Notes again issued. wj. Q. When the Democrats again came into power in 1845, did they again authorize an issue of legal tender U. S. Notes, and again pass the Independent Treasury Act in 1846, prohibiting the reception of anything but legal tender U. S. Notes and coin into the Treasury, and again make it an act of felony to deposit any public moneys with the Banks ? A. They did; and on July 22d, 1846, and January 28th, 1847, they again authorized an issue of legal tender U. S. Notes, which being legal tenders for duties on importations, they passed abroad as bills of exchange, and commanded a premium abroad over gold equal to half the rate of exchange. These U. S. Notes carried on the war with Mexico, as they in i8i2-'i4 had carried the United States successfully through the waf with Great Britain. THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 25 No U. S. Notes made Redeemable on Demand previous to i86r. 118. Q. Were- any of the legal tender U. S. Notes issued previous to March 4th, 1861, made redeemable on demand in coin or specie? A. No. U. S. Notes not made Legal Tenders for Private Debts previous to 186 1. 119. Q. Were the U. S. Treasury Notes issued previous to March 4th, i86i, made legal tenders for debts due by the United States or for private debts; and if not, what power did it give to the Banks of Issue? A. The U. S. Notes issued previous to 186 1 were not made legal tenders for public or private debts; they were merely made legal tenders for public dues, and this enabled the Banks of Issue to refuse to receive them at par in payment of the notes of individuals or companies, discounted by the Banks, in exchange for their promises to pay on demand in lawful money, which were mere evidences of debts due by these Bankers to the public, and which promise in 1861 they failed to make good, as they had previously done on numerous occasions. It was a promise made to be broken, and was therefore a fraud on the public. Financial Measures to Carry on the Civil War. U. S. Demand Notes Issued. 120. Q. Was an extra session of Congress held in July and August 1861, and if so, what Acts were passed to raise money to carry on the War of i86i-'6s ? A. In July and August, 1861, Congress held an extra session, and on July 17th, it passed an Act authorizing the Secretary of the Treasury to borrow 250 millions of dollars, for which he was authorized to issue coupon or registered Bonds or Treasury Notes in such proportions as he might deem advisable. The Bonds were to bear interest, not exceeding 7 per cent., payable semi-annually, and after twenty years to be paid at the plea- sure of the United States. The Treasury Notes were to be issued in denominations of not less than ^50, payable three years after date, with interest at J-^ per cent., payable semi-annually, and exchangeable at any time for twenty years, six per cent. Bonds; or at his option the Secretary of the Treasury might issue 50 mil- lions of dollars of this loan in Treasury Notes not bearing interest, of no less denominations than ^10, made legal tenders for salaries and other public debts, and payable on demand in specie. They were known as the " de- mand" Notes, Congress on August 5th, 1861, passed an Act supplementary to the Act of July 17th, which authorized the Secretary of Treasury to issue twenty years, 6 per cent. Bonds, of no less denomination than ;^500, in ex- change for the Treasury Notes, bearing 7^^ per cent, interest. It also authorized the demand Notes to be issued of the denomination of ^5, and to be a legal tender for public debts. The 6th Section of this Act suspended so much of the Sub-Treasury Act of 1846, as prohibited any public moneys from being deposited in any Bank. 1 Congress on February 12th, 1862, authorized the Secretary of the 26 THE OBJECT AXD DUTY OF CIVIL GOVERNMENT. Treasury to issue an additional gio millions of Treasury Notes, payable on demand in specie, as a part of the loan authorized by the Act of July 17th, 1861. Congress on March 17th, 1862, passed an Act making the g6o millions of "demand" Notes legal tenders for private debts, dues and de- mands, as well z.sfor duties on imports, salaries and other public dues and demands, and prohibited their redemption on demand in specie, ivhen they rose to an equal premium -with gold coin. The State Banks could not Pay in Specie. 121. Q. Did the State Banks of Issue take any part of the loan author- ized by the Act of July 17th, 1861, and if so, how much, and why? A. They took this loan, because they expected to be permitted to pay it in their State Bank Notes, as the Secretary of the Treasury should draw his checks on them from time to time, in proportion to the share of each Bank. The Batiks Paid with U. S. Notes. 122. Q. Were these Banks enabled to pay for the ^150 millions of U. S. Bonds, with thdr promises to pay on demand in specie, and if not, what was the result? A. The Secretary of the Treasury demanded specie for the U. S. Bonds, taken by these Banks, and they suspended specie payments on Decemder 31st, 1861, to force the Government into their measures. They had paid a portion of the loan in specie and the balance they paid in the U. S. "'demand" Notes, and the Treasury Notes bearing 7^^ per cent, in- terest, payable semi-annually. The last of the loan was paid in this way on February 3d, 1862. No U. S. Notes made Redeemable 07i Demand previous to 186 1. 123. Q. Previous to July 17th, 1861, had Congress ever issued legal lender U. S. Notes, payable on demand in specie? A. It had not' The Repeal of the Independent Treasury A.ct in 186 1 depreciated U. S. Notes. 124. Q. Did the suspension of the Banks in December, 1861, depreciate the value of the U. S. d-emand Notes, and if so, why? A. The demand Notes not having been made legal tenders for private debts, previous to the bank suspension in December, 1 86 1, the Banks of Issue refused to take them at their nominal value, in payment of debts due to them, which depreciated them to a level with the suspended Bank currency. The suspension of specie payments by the Banks locked up the gold coin, the only specie then in circulation, and this made it impossible for the United States to redeem the demand Notes in specie. U. S. Notes not redeemable, more valuable than when made redeemable on Demand in Specie. 125. Q. What proves that U. S. Notes, not bearing interest, but made THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 2/ legal tenders for public and private dues and demands, and not made re- deemable on demand in specie, are more valuable and useful than legal tender U. S. Notes or Bank currency, made redeemable on demand in specie or in gold coin? A. The fact that the U. S. demand Notes of 1861, and 1862, when not legal tenders for all public and private debts, and redeemable on demand in specie, when there was no specie in the Treasury to redeem them with, became depreciated to a level with suspended Bank currency in 1861, and that when their redemption on demand in specie was prohibited, and they were made receivable y^r duties on imports, equally with gold coin, and also made legal tenders for other public and private debts, dues and demands, they bore an equal premium with gold coiti. Why gold Coin commanded a Premium. 126. Q. What caused gold coin, and the U. S. Notes made the only legal tenders for duties on imports to command a premium? A. Because the demand for legal tenders to pay duties on imports ■was greater than the supply. The rate of premium indicated the difference between the demand and the supply. These U. S. Notes received for duties on imports, and the gold coin in 1864 were each worth 285 cents on the dollar. The Legal Tender U. S. Note Act of February 1862. 127. Q. What important Bill authorizing an issue of paper money not "bills of credit" was introduced into Congress on December 30th, 186 1, and by whom? A. E. G. Spaulding, of Buffalo, N. Y., on the 30th of December 1 86 1, offered a Bill in the Houseof Representatives to authorize the Secretary of the Treasury to issue ^ICXD millions of U. S. Notes, legal tenders, not bearing interest, and not redeemable on demand, nor payable at any place or time named in said Bill. The lowest denomination of said notes was Five dollars. These U. S. Notes and those known as demand Notes, were by this Bill as passed by the House made receivable for all debts due to the United States, and for all salaries, dues, debts and demands owing by the U. S. to individuals and corporations and associations within the United States, and was declared to be lawful money, or a legal tender in payment of all debts, public and private within the U. S. and were made convertible in sums of ^lOO into any 6 per cent. Bonds, previously issued or that might thereafter be issued. They were also to be received the same as legal tender coin, at their par value, in payment of any Bonds that might be negotiated by the Secretary of the Treasury. It was referred to the Committee of Ways and Means, of which Mr. Spaulding was a member. The Bill was fully considered and favorably reported to the House by the Committee of Ways and Means, on January '7th, 1862. This Bill was first proposed by Thaddeus Stevens, early in December, 1861. 28 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. A Delegation of Bankei'S oppose the U. S. Note Bill. 128. Q. When this Bill was made public, did a delegation of Bankers interested in Banks of Issue, hasten to Washington City to induce Congress to refuse to pass it? A. They did. 129. Q. When the Bank delegates arrived in Washington City, what measures did they take to defeat Spaulding's Bill? A. They invited the Finance Committee of the Senate and the Committee of Ways and Means of the House to meet them at the Office of the Secretary of the Treasury, on January nth, 1862, at which meeting the delegation made several propositions, amongst which was one to suspend the Sub-Treasury Act of 1846, so as to allow the Banks of Issue to become depositories of the p7iblic moneys, obtained by loans and otherwise, and to permit the Government of the United States to draw checks on the Banks from time to time, as the Government might want money. Another was to issue 6 per cent. U. S. Bonds, to be negotiated by the Secretary of the Treasury without any limit as to the price he might sell them at. They op- posed the issue of any U. S. Notes made legal tenders for duties on imports. Their propositions were rejected by the Committee of Ways and Means of the House. Mr. Spaulding was an experienced banker and an able legis- lator, and was desirous of doing what he knew would furnish the Govern- ment with the money necessary to carry on the war, and to make the in- dustries active a7id prosperous. U. S. Notes made Convertible i?ito Bonds. 130. Q. What further did the Committee of Ways and Means deem it necessary to make a part of Spaulding's legal tender U. S. Note Bill? A. The Committee of Ways and Means on January 22d, 1862, re- ported an additional Section to Spaulding's Bill, authorizing the Secretary of the Treasury to issue ;g500 millions of U. S. 6 per cent. Bonds, coupon or registered — the interest payable semi-annually — into which the legal tender U. S. Notes and the Treasury Notes, bearing interest, and the floating debt might be bonded or converted. This Bill, as amended by the Committee, was made the order for consideration by the House on January 28th, 1862. The debate on this Bill was able and instructive. The Bankers opposed it, and a few Democrats who were opposed to making the U. S. Notes legal tenders lor private debts, dues and demands, attempted to so amend it, con- trary to every principle of the Constitution of the U. S., which required Congress to regulate the value of money, by making all money equal legal tenders; the only way in which money ca7i be made of equal value, whether composed of coin or of "public bills;" and also contrary to the uniform hostility of the Democratic party to Bank currency or to Banks of Issue. True, the Democratic party for more than fifty years had issued U. S. Notes legal tenders for all public demands, duties on imports iilcluded, but which were not legal tenders for all public nor private debts. The only reason for such a course of policy was to avoid the greater opposition of the advocates of Bank currency, to the use of U. S. Notes made legal tenders in that limited THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 29 form; the U. S. Notes, not having been made legal tenders for private debts, enabled Bankers to depreciate them, when tendered in payment of debts due to them. The Spaulding Bill passed the House, with some slight and immaterial amendments, on February 5th, 1862. U. S. Bank Notes had been made Legal Tenders. 131. Q. Had Congress in 1791 and in i8i6 chartered U. S. Banks with power to issue "bills of credit," that is to say Notes payable on demand in specie, as a circulating medium, and had it made them, legal tenders for duties on imports and for debts due the United States? A. It had; and therefore no advocate of Bank currency made legal tenders for public dues and demands can consistently oppose an issue of "public bills" or U. S. Notes, made legal tenders for all public and private debts, dues and demands. Moreover, what is a 'public legal tender is virtually a private legal tender with all but the Banks of Issue, for debts due them. The House made U. S. Notes fidl Legal Teitders. 132. Q. Did the Spaulding Bill pass the House with U. S. Notes or "Greenbacks" made legal tenders for all debts, dues, and demands, public and private, without any exception whatever f A. It did ; and was so sent to the Senate of the United States for consideration. The Senate Amended the Full Legal Tender U. S. Note Bill. 133. Q. What did the Senate do with the Spaulding Bill? A. It amended it in four important particulars. First. It pro- hibited the U. S. Notes from being legal tenders for the interest paj^able on Bonds and interest-bearing Treasury Notes, which the Senate proposed should be paid in coin. Second. That the Secretary of the Treasury might dispose of the U. S. Bonds at the market value thereof, for coin or U. S. legal tender Notes, to be issued under this Bill. Third.' It proposed a new Section, authorizing a deposit of ^25 millions, for which Certificates of Deposit were to be issued, bearing 5 per cent, interest, and payable in not less than 30 days. Fourth. It proposed another additional section, that all duties on imported goods and the proceeds of the sales of the public lands, etc. , should be set apart to pay coin interest on the debt of the United States ; and one per cent, for a sinking fund, etc. On .the 1 4th of February, 1 862 , the Spaulding Bill, as amended, passed the Senate and was returned to the House. What Senator Howe said about Redeemable Currency in 1862. 1 34. Q. What did Senator Howe, of Wisconsin, say in the Senate of the United States, in 1862, in relation to a proposition to make legal tender U. S. Notes payable on demand in specie f A. Senator Howe said : "All paper currencies have been and ever -" will be irredeemable. It is a pleasant fiction to call them redeemable ; it " is an agreeable fancy to think them so. I would not dispel that fancy ; I 30 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. " would not oppose that fiction ; only that the great emergejicy which is upon "us, seems to me, to render it more than usually proper, that the Nation "should begin to speak tnith to itself, to have done with sliains and deal "with realities.'^ The Senate Amendments Referred. 135- Q- What action did the House take on Spaulding's Bill, as amended by the Senate ? A. It referred it to the Committee of Ways and Means, and was reported by it to the House for consideration, on February i8th, 1862. Thaddeus Stevens, Chairman of that committee, said: "I havs no purpose "of considering the Bill at this time. I desire that it shall be referred to "the Committee of the Whole, and be made the special order for to-morrow "at I o'clock. I hope gentlemen of the House will read the Amendments. "They are very important, and in my judgment, very pernicious, but I hope "the House will examine them." Wliat Spaidding said about the Senate Amendments. 136. Q. Who opened the debate in Committe of the Whole on Febru- ary 19th, and what did he say in opposition to some of the Senate Amend- ments ? A. Mr. Spaulding opened the debate, and said: "Mr. Chairman, I "desire especially to oppose the Amendments of the Senate, whicli require "the interest on bonds and notes to be paid ift coin, semi-annually, and "which authorizes the Secretary of the Treasury to sell 6 per cent, bonds "at the market price, for coin to pay the interest." "I am opposed to all those amendments of the Senate which make unjust "discriminations between the creditors of the Government. Who a.sk to "have one class of creditors placed on a better footifig than aiiothcr class "Sir, it is a very respectable class of gentlemen, but a class of men who are "very sharp, in all money transactions. They are not generally among the "producing classes — not among those who by their labor and skdl make the "wealth of the country; but a class of men who have accumidated wealth ; "men who are willing to lend money to the Government, if you will make " tlie security beyond all question, give them a high rate of interest, and make "it payable in coin. Yes, sir, the men who are asking these extravagant "terms, who want to be preferred creditors, are perfectly willing to lend "money to the Government in her present embarrassments, if you will only "make them perfectly secure, give them extra interest, and put your bonds on "the market, at the 'market priced to purchase gold and silver, to pay them " interest every ^\x. months." "Sir, the legal tender Treasury Note Bill was intended to avoid all such "financiering, and protect the Government, and people who pay the taxes, from "all such hard bargains. It was intended as a shield in the hands of the "patriotic people of the country, against all forced sales of bonds, and all ex- " travagant rates of interest. The Legal Tender Note Bill is a great measure " of equality. It proposes a currency for the people, which is based upon the "great faith of the people, and all their taxable property." THE OBJECT AND DUTY OF CIVIL GOVERNJIENT. 3 1 The House made Ditties on.Impm'ts Payable in U. S. Notes. 137. Q. Did Mr. Spaulding's Bill as it passed the House on February i6th, 1862, authorize the duties on imports, and the public lands purchased, to be paid for in legal tender U. S. Notes? A. It did. What Stevens Said abotit the Senate Amendments. 138. Q. What did Thaddeus Stevens say on February 20th, 1862, in re- gard to the Senate amendments? A. Mr. Stevens said: "Mr. Speaker, I have a very few words to " say. I approach the subject with more depression of spirits than I ever-be- " fore approached any question. I have a melancholy foreboding that we are " about to consummate a cunningly devised scheme which will czxry great injury " and great loss to all classes of the people Ihroughoxitth.QXJmon, except one." " With my colleague, I believe that no act of legislation of this Govern- " ment was ever hailed with as much delight throughout the whole length "and breadth of this Union, by every class of people, without any exception, "as the Bill we passed and sent to the Senate. * * It is true, there was "a doleful sound came up from the caverns of bullion brokers, and from the "saloons of the Associated Banks. Their cashiers and agents were soon on "the ground and persuaded the Senate, with; but little deliberation, to "mangle and destroy what it had cost the House months to digest, con- "sider and pass. They fell upon it in hot haste, and so disfigured and de- " formed it, that its very father would not know it." After having examined the amendments separately, as made by the Senate, he said: "But now comes the main clause. AH classes of people "shall take these Notes, at par, for every article of trade or contract, unless "they have money enough to buy U. S. Bonds, and then they shall be paid "in gold. Who is the favored classl 'Vsxq Banks z.\\A Brokers, 2.wA nobody "else." * * "But how is this gold to be raised? The duties and public lands are to "be paid for in U. S. Notes, and they or Bonds are to be put at aitction, to " get coin for these very Brokers, who would furnish the coin to pay them- " selves, by getting 20 per cent, discount on the notes thus bought." TJte U. S. Note Bill referred to a Commitee of Conference. 139. Q. Did the House concur in all of the amendments made by the Senate to Spaulding's Bill? A. It did not. A Conference Committee was 'appointed. The Senate appointed Messrs. Fessenden, Sherman and Carlisle; and the House appointed Messrs. Stevens, Horton and Sedgwick. The Committee were long in session, and finally reported the Bill, with the important alteration, that the U. S. Notes should not be legal tenders /tir duties on imports, which were made payable in coin, nor for the interest on 'the Bonds, and interest- bearing Treasury Notes ; and as gold was then the only coin in issue and circulation, the duties became payable in gold coin only. This placed a premium on gold coin equal to the excess of demand over the supply. 32 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. This alteration was adopted by the House. The Senate amendment, that the duties on imports should be set apart to pay the interest on the U. S. Bonds and one per cent., as a sinking fund, also became a part of the Spaulding Bill The House, on February 24th, 1862, passed the Bill as agreed upon by the Conference Committee. The Senate, on February 25th, 1862, concurred in the Bill as reported by the Conference Committee; and on the same day it was approved by the President, and thus became a law. The Banks controlled the Senate. 140 Q. What did Thaddeus Stevens say about the Senate having been controlled by the Associated Banks? A. The Hon. Wm. D. Kelly, of Philadelphia, in a speech delivered in that city on January 15th, 1876, said: "I remember the grand "Old "Commoner," (Thaddeus Stevens) with his hat in his hand, and his cane "under his arm, when he returned to the House after the final conference "and shedding bitter tears over the result. 'Yes,' said he, 'we have had "to yield; the Senate was stubborn. We did not yield, until ive found XhsX "the country must be lost, or the Banks be gratified, and we have sought to "save the country in spite of the cupidity of its wealthier citizens.' " The " Greenbacks" are not Promises to Pay on Demand. 141. Q. What words were printed on the back of the first legal tender U. S. Notes, issued under the Act of February 25th, 1862? A. These U. S. Notes were issued on March loth, 1862,- and the following words were printed on the back of them: "This note is a legal "tender for all debts, public and private, except duties on imports and "intersest on the pubHc debt, and is exchangeable for United States six "per cent. Bonds, redeemable at the pleasure of the United States, after five "years." U. S. Notes not Redeemable on Demand, again Issued. 142. Q. Did the Act of February 25th, 1862, provide in its first Section for an issue of ^150 millions of U. S. Notes, legal tenders for all taxes, in- ternal duties, excises, debts and demands of every kind due to the United States, except duties on imports, and of all claims and demands agaifist the United States of every kind whatsoever, except for interest on the Bonds and Notes (jf^ Treasury Notes of July 17th, 1861), which were to be paid in coin, and to be a legal tender in payment of all debts^-^M^ and private — except duties on imports and interest as aforesaid, and not made payable on demand in coin, but convertible into the U. S. Bonds issued under Sec- tion 2 of this Act of February 25th, 1862? A. It did. Certificates of Deposit Authorized in 1862. ..143. Q. Did this Legal Tender and Bond Act of February 25th, 1862, authorize a deposit of said legal tender U. S. Notes, for Certificates of De- THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 33 posit payable on ten days notice to the amount of ^25 millions, bearing interest at the rate of 5 per cent. ? A. It did. All Issue of U. S. Bonds Authorized in 1862. 144. Q. Did this legal tender U. S. Note Act authorize an issue of ^500 millions of Bonds, registered or coupon, bearing 6 per cent, interest? A. It did. Fifty Millions of Demand Notes Destroyed. 145. Q. Were the ^50 millions of' the demand Treasury Notes issued under the Act of July 17th, i86i,made by the Act of February 25th, 1862, convertible mto the U. S. Notes, to be issued under this Act, and then to be destroyed? A. They were. How U. S. Notes were made Equal to Gold Coin on March ijth, 1862. 146. Q. Were the $60 millions of demand Notes made equal legal ten- ders with gold coin, on March lyth, 1862 ; that is to say, were they equally with gold coin receivable for duties on imports and for all public and private debts, dues and demands, and if so, what result did it produce? A. They were ; and by making them an equal legal tender with gold coin, it placed them on an equality or par with gold coin, or in other words they bore an equal premium with gold coin. How to Regulate the Value of Money. I4y. Q. Does not this prove that the only way to regulate the value of money is to make them equal legal tenders? A. It does. Knowledge Gained by Experience. 148. Q. What has once been done to make legal tender gold coin and legal tender U. S. Notes par with each other, may it not safely be done again, and at all times? A. Certainly it may. The Supply of Money Decreased. 149. Q. As the legal tender U. S. Note and Convertible Bond Act of February 25th, 1862, required the substitution of the U. S partial legal tender Notes for ^50 millions of the full legal tender U. S. Notes of the Act of March 17th, 1862, did it not to this extent decrease the supply of money to meet the demand to pay duties on imp07'ts, and thus increase the premium on gold coin; which with ;gio millions of demand Notes were the only legal tender money receivable for duties at the custom houses? A. It did. The Amount of Premium on Gold in 1862. JSO. Q. What was the premium on gold coin in February, 1862? A. Gold coin, then the only money receivable for duties on im- 3 34 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. ports, was in February, 1862, from 2^ to 4^ cents premium on the dollar. 14^/iy the Premium on Gold Decreased. 151. Q After the so-called demand Notes were made full or equal legal tenders with gold coin, on March 17th, 1862, and therefore equally witii gold coin receivable for duties on imports, what was the premium on gold coin? A. The. premium on gold coin in March, 1862, was from i^ to 2^ cents on the dollar. How the Premium on Gold Coin was Increased. 152. Q. As the §50 millions of U. S. Notes, received for duties on im- ports and full legal tenders for all debts, dues and demands — public and private — equally with gold coin, were withdrawn from circulation and de- stroyed, by substituting for them U. S. partial legal tender Notes of the Act of February 25th, 1862, which were not receivable for duties on imports, nor payable for the interest on the U. S. Bonds and "j-^ interest-bearing Treasury Notes, what effect did it have on gold coin? A. It increased the premium on gold coin, because it increased the demand for it. The premium on gold coin and the ;^io millions of U. S. Notes, receivable for duties on imports, remaining in circulation, in July, 1862, was from 9 to 205^ cents premium on the dollar. In July, 1863, it was from 231^ to 45 cents premium on the dollar, and in July, 1864, it was from 122 to 1855^ cents premium on the dollar, which made gold coin and these U. S. Notes receivable for duties on imports, worth from ;^2.22 to ^2.851^ on the dollar. The Reason Why Gold Coin was Made to Command a Premium. 153- Q- What was the obvious purpose of the Bankers as Bondholders in inducing Congress to make the interest on the U. S. Bonds and Treasury Notes bearing interest, payable in coin and prohibiting the U. S. Notes known as " Greenbacks," from being legal tenders for diities on imports? A. It was to make a premium on gold, the only full legal tender coin then in circulation, in order to increase the interest payable to them, equal to the premium on coin. It was truly a cunningly and wickedly devised scheme. A U. S. Bank Act Requested by the Secretary of the Treasury. 154. Q. Did S. P. Chase. Secretary of the Treasury' of the U. S., in the early part of December, 1861, in his annual report to Congress, ask it to charter U. S. Banks? A. He requested and advised Congress in December, 1861, to charter U. S. Banks. 155. Q. Did the Secretary do this before or after the State Banks of Issue failed in 1861? A. He did it before the Banks failed in 1861; and he did it again in December, 1862. THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 35 W/iy Were U. S. Notes Issued in 1862 f 156. Q. Why did the Congress of 1862 follow the example set by the Democratic party in 1812, '13, '14, '15, '37 and '47 by issuing legal tender U. S. Notes, instead of borrowing the promissory Notes of the Banks of Issue ? A. Simply because the Banks had suspended payment of their promises to pay their Notes on demand in coin, and the Banks being unable to furnish means, the advocates of Bank currency were forced to resort to an issue of legal tender U. S. Notes, to obtain the means of carrying on the Civil war. Spaulding and Stevens Were Advocates of Bank Ctnrency. 157. Q. Were Spaulding and Stevens, who so ably advocated the passage of the legal tender U. S. Note Bill of February 25th, 1862, the advocates of Bank currency, and if so, why did they insist on an issue of legal tender U. S. Notes ? A. The Banks of Issue failed on December 31st, 1861, and Mr. Spaulding opened the debate in favor of the legal tender U. S. Note Bill in February, 1862, and said: "The Secretary of the Treasury in his annual "report did not recommend the issue of demand Treasury Notes, although "he points out many advantages that would result to the Government from "the issue. He suggests * * a National (U. S. Bank) currency, se- " cured by a pledge of U. S. Stocks to be issued by Banks and Associations, " with proper regulations for their redemption, by the Banks thetnselves. On "the propriety of the issue of Treasury Notes by the Government, to be " put in circulation as money, the Secretary says : 'The first of these plans was "partially adopted, at the last session of Congress, * * that provision may "be extended, so as to reach the average circulation of the country, while a "moderate tax, gradually augmented on [State] Bank Notes, will relieve " the National [U. S. Banks] from the competition of local [State Bank] "circulation. It has been already suggested, that the substitution of a Na- "tional, [U. S. or Federal] for a State currency, upon this plan, would be "equivalent to a loan to the [U. S.] Government without interest [?] except "on the fund to be kept in coin, and without expense [?] except the cost of "preparation, issue and redemption; while the people would gain the addi- " tional advantage of a uniform currency, and relief from a considerable "burden, in the form of interest on debt.'" " These remarks of the Secretary were made before the suspension of specie payments. The situation of the country is now very different from what it was two months ago. The circumstances have changed; and the Secretary and Congress will find it necessary, in the present exigency, to conform their action to what can be done, and not to wliat they would like to do, were it otherwise practicable." "The second plan of the Secretary, and the one which he recommends for adoption, namely, a National currency, to be issued by [U. S.] Banks, and secured by a pledge of U. S. Stocks, the sub-committee of Ways and Means have examined with considerable care. * * The committee have 36 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. come to the conclusion that however meritorious this system may be, in providing a way for funding the Stocks of the U. S., and however perfect the system may be made by Congress, it cannot, if adopted, be made available soon enough to meet the impending necessities of the Government." "If you cannot borrow the money on the credit of the U. S. except at ruinous rates of discount, and catmot make the new Banking system available in time, and cannot reahze the amount required from your Tariff, and Tax Bills, in what mode can the means be obtained, and the Government be car- ried on? It is believed that the only way in which it can be done, is by issuing Treasury Notes * * and making them a legal tender, z« /-rtj/w^/// of all debts, public and private, and by adequate taxation, to be imposed by new Bills." * * "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 Gov- ernment, with all its immense power and resources, should be left in the hands of any class of men. Bankers or money-lenders, however respectable[?] and patriotic[?] they may be. The Government is much stronger than 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 thirty millions of people under its jurisdiction. Why, then, should it go into Wall street * * or any othei- street, begging for money? Their money is not as secure as Government money. All the gold they possess, vifould not carry on the Government for ninety days. Tliey only issue pi'omises to pay, which if Congress does its duty, are not half as secure as U. S. Treasury Notes, based on adequate taxa- tion upon all the property of the country." * * "These circulating Notes in the hands of the people would enable them to pay taxes imposed, and would facilitate all business operatiojis, between farmers, mechanics, commercial business men and Banks, and be equally as good, and in most cases better, than the present irredeemable circulation issued by the Banks." During the debate on the legal tender U. S. Note Bill, Mr. Spaulding further said: " I desire to call the attention of the House to a letter which I have just received from the Secretary of the Treasury. It is a note to me urging the immediate passage of this Bill, without further delay. For the purpose of letting the House understand the necessities of the Treasury, I ask the Clerk to read an extract from that letter." The Clerk read as fol- lows : "Immediate action is of great importance. The Treasury is nearly 'empty. I have been obliged to draw for the last installment of the ' November loan, so soon as it is paid, I fear the Banks generally -will repise ' to receive the U. S. Notes, unless made a legal tender. You will see the 'necessity of urging the Bill through without more delay. I came, with 'reluctance to the conclusion, that the legal tender clause is a necessity ; but ' I came to it decidedly, and support it earnestly * *." Thaddeus Stevens, in concluding the debate, said: " Mr. Chairman, This Bill is a measure of necessity, not of choice. No one [in favor of Banks THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 37 of Issue] would willingly issue paper currency, not redeemable on demand, and make it a legal tender. It is never desirable to depart from the circu- lating medium, which, by common consent [amongst advocates of Bank currency] of civilized Nations, forms the standard value. But it is not a fearful measure, and when rendered necessary, by exigencies, it ought to pro- duce no alann." * * "Before the [State] Banks had paid much of the last loan, they broke down under it, and suspended specie payments. They have continued to pay that loan, not in coin, but in dcmaitd Notes of the Government, that has kept them at par; but this last of the loan was paid yesterday, and on the same day the Banks refused to receive them. They must now sink to a depreciated currency." [Congress had not then made them a legal tender for private debts.] "Without the legal tender clause, the Notes could not be kept at par. Brokers, Bankers, and others, ivoidd depreciate tJiem. The National Bank scheme, recommended by the Secretary, might, in ordinary times, be very useful, but while the Banks are under suspension, it was not easy to see how it would relieve the Government. * * He thought the Government shculd have the benefit of the circulation of legal tender Notes, and did not see how we could get along in any other way." * * Tlie Suspension of the Banks in 1861. 158. Q. When the State Banks of Issue failed on December 31st, 1861, what amount of promissory Notes had they in circulation, on which the public was paying them interest, and what amount of specie did they claim to have v^^ith which to pay their promissory Notes? A. The Broken Banks had in circulation about ^150 millions of promises to pay on demand in specie; and on December 31st, 1 86 1, they claimed to have about ^29 millions of specie. Supposing them to have had that amount of specie, their promissory Notes were worth less then 20 cents on the dollar. The Suspended Banks did not Pay their Debts. 159. Q. When the Banks of Issue failed in December, i86i, did they use the specie they then claimed to have, to pay any part of their debts? A. No. They locked their doors on their creditors, and snapped their fingers in their faces; bidding defiance to all laws. They used the specie they claimed to then have, to speculate with, and left their Notes, payable on demand in specie, unpaid, on which the}' were drawing interest; but took good care to make all persons owing them, prom.ptly pay them in the lawful money of the United States. The Banks of Issue did not Aid the Government. 160. Q. Has it not been claimed that the Banks of Issue aided the Government of the United States to prosecute the War against the Southern States ? A. It has been falsely so claimed ; as has been clearly shown, in answer to question 157. 38 THE OBJECT AND DUTY OF CIVIL GOVERNjMENT. A further Issue of U. S. Notes to carry on the Civil War. 161. Q. What further did Congress do to procure money sufficient to carry on the War of 1861-65 ? A. It authorized a further issue of legal tender U. S. Notes. The $\0 millions of demand Notes after February 25th, 1862, were no longer redeemable on demand in coin, as the Legal Tender Act of that date set aside all coin to pay the interest on the U. S. Bonds and interest-bearing Treas- ury Notes, and after the demand Notes were made equal legal tenders ivitli coin for duties on imports, and all other debts, public and private, except in the payment of interest as aforesaid, they bore an equal premium with gold, the only coin then in circulation, which proves conclusively, that the equal power of paper and metallic money is made by the law which makes them equal legal tenders for public and private debts. Congress in i86j passed an Act to Create U. S. Banks. 162. Q. Did Congress in 1863, as requested by S. P. Chase, Secretary of the Treasury of the United States, pass an Act to create United States Banks? A. On February 25th, 1863, Congress passed the U. S. Bank Act. The first section provided that not less than five persons may form an Association for carrying on the business of banking. The second section gave such Associations corporate powers for twenty years, to sue and be sued, etc. The third section made the capital stock of a barfk in places with a population not to exceed ten thousand persons, $50 thousand ; not less than ;gioo thousand in places having a population in excess of six thousand persons; and not less than $200 thousand in places having a population in excess of fifty thousand persons. The fourth section limited the Bank Notes at ;?354 millions to be loaned to such Associations; and it apportioned this loan as follows: ^^150 millions among the several States and Territories according to representative population; ,^150 millions was to be distributed in the discretion of the Secretary of the Treasury; and the remaining ;g54 millions to such States and Territories, having less than their share, as might make application previous to July 12th, 1871; the fifth section pro- vided that no Association should commence business until it had deposited $-^,0 thousand of U. S. Bonds with the Treasurer of the United States; the sixth section provided that each Banking Association should be entitled to a loan of Bank Notes to the amount of 90 per cent, of the capital stock, that is to say, of the amount of U. S. Bonds deposited as security for the loan of such Bank Notes, if tlie capital did not exceed ,^500 thousand; if it exceeded ^^500 thousand and did not exceed $ i million, then only 80 per cent, in Bank Notes was to be loaned to the Association ; if it exceeded $ i million and did not exceed $3 millions, 75 per cent of Bank Notes was to be loaned to the Association ; and if it exceeded S3 millions, then only 60 per cent, of Bank Notes was to be loaned to the Association. When the U. S. Banks Went into Operation. 163. Q. As these U. S. Banking Associations were based on a deposit THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 39 of U. S. Bonds, as security for the loan of U. S. Bank Notes, made legal tenders for all public dues and demands, except duties on imports and in- terest on the U. S. Bonds and interest-bearing Treasury Notes, did these Banking Associations go into operation in February, 1863, and if not, from what cause did it arise? A. The legal tender U. S. Note Act of February 25th, 1862, au- thorized the Secretary of the Treasury to issue ;^500 millions of 6 per cent, interest-bearing Bonds, into which the legal tender U. S. Notes were to be converted at the pleasure of the holder of such Notes. The Secretary of the Treasury was authorized to dispose of any of these Bonds, but as the issue of U.S. Notes made the business of the country active and prosperous,, and as the wealth-producing capitali.sts or business men had no surplus means to invest in these Bonds, and the Bankers connected with the State Banks of Issue became bankrupt on December 31st, 1861, the Secretary of the Treasury had disposed of only $25 millions of these Bonds, up to February 25th, 1863, and as no Banking Association could commence business on a deposit of less than $2,0 thousand of U. S. Bonds, they could not commence business as U. S. Banks until the people could be induced to convert their legal tender U. S. Notes into U. S. Bonds. Why U. S. Notes were Converted into U. S. Bonds. 164. Q. What induced the people to convert their U. S. legal tender Notes into U. S. Bonds ? A. Mr. Spaulding, as an experienced Banker, in his speech in sup- port of the U. S. Bank Bill in 1863, called the attention of the public to the fact, that by bonding legal tender U. S. Notes, they would get 90, 80, 75 or 60 per cent, of their investment back in legal tender U. S. Bank Notes, to bank on, and speculate with, being paid the interest on, the Bonds, and ex- emption from texation thereon, for taking the loan, which made two rates of interest on one and the same dollar, then equal to at least 8 per cent, per annum, with a third rate of interest on the U. S. Note. But, as the State Banks were broken, and the issue of legal tender U. S. Notes enabled the business to be done mainly with cash, instead of with time Notes or com- mercial paper, the wealth-producing business men had no surplus money to invest in Bonds; consequently the U. S. Banks could not and did not go into operation until January, 1864, nearly a year after the U. S. Bank Act was passed. U. S. Banks created to Advantage Certain Persons 165. Q. As the legal tender U. S. Notes — not redeemable on demand in specie — had successfully carried on the civil war, as it did the war of 1 81 2, with the British Government, and the War of 1846, with Mexico, what prompted Spaulding and other experienced men to pass a U. S. Bank Act and put U. S. Bank Notes in competition with U. S. legal tender Notes? A. Simply because the circulation of U. S. Notes or "Greenbacks" inured to the benefit of the whole people, and was enriching them in- dependent of Bankers ; whereas U. S. Bank Notes were calculated to enrich 40 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. a few men who never invest a dollar in wealth-producing industry, at the expense of wealth-producing business men and wage-workers. TIic Plausible Pretext for Bank Currency. 1 66. Q. Under what plausible pretext is this swindle of Bank currency advocated? A. Under the lying and hypocritical pretext, that it is based on specie for redemption on demand. One dollar of specie or coin basis, or one dollar of " Greenbacks," never did, and never can redeem two, three, or four dollars of Bank currency, promising payment on demand in coin, or in lawful money of the United States; and none but idiots are deceived by this so-called specie or gold basis system of Bank currency, to enrich a few men at the expense of the toiling millions. Any man, with a full knowledge of the foregoing facts, who advocates such a swindling system of currency, should be looked upon as one who would take " from the mouth of labor the bread it has earned," to build up a moneyed Aristocracy or a privi- leged class, specially favored and protected by unequal and unjust laws. The Original Design of Spaulding mid others. 167. Q. Was it the original design of Spaulding and of others in Con- gress in 1862, who were interested in Banks of Issue, to use the legal tender U. S. Notes to carry on the Civil War, and enrich bankrupt Bankers, and then to destroy these Notes, to give the entire circulation to U. S. Bank currency? A. It was. The Hon. E. G. Spaulding of the Committee of Ways and Means, when he opened the debate on the Bill to authorize an issue of legal tender U S. Notes, etc., on January 28th, 1862, said: "The Bill before us is a war measure, a measure of necessity and not of choice. * * These are extraordinary times, and extraordinary measures must be resorted to. * * Having exhausted other means of sustaining the Government, this measure is brought forward as the best that can be devised in the present emergency. * * You cannot borrow of capitalists any more money, on 20 years 7 per cent. Bonds, nor on your J^ Treasury Notes. * * What then is to be done? * * The .second plan of the Secretary [of the Treasury], and the one which he recommends for adoption, namely, a national currency, to be issued by Banks, and secured by a pledge of \J. S. Stocks, the Sub-Com- mittee of Ways and Means have examined with considerable care. * * The Committee have come to the conclusion that * * it cannot, if adopted, be made available soon enough." * * What Stevens said about U. S. Notes. The Hon. Thaddeus Stevens, Chairman of the Committee of Ways and Means, in closing the debate on this Bill, as it passed the House, said: "This Bill is a measure of necessity, not of choice. * * Before the Banks had paid much of the last loan they broke down under it and suspended specie payments. * * Without the legal tender clause the Notes could not be kept a't par; Brokers, Bankers and others would depreciate them. The National THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 4 1 Bank scheme, recommended by the Secretary, might, in ordinary times, be very useful, but while the Banks are under suspension, it was not easy to see how it would relieve the Government. They would have the circula- tion witJiout interest, and at the same time would draw interest on the Bonds, and afford no immediate relief. The Government should have the benefit of the circulation of legal tender Notes, and I do not see how we can get along in any other way." Wliat Senator Howe said about a Paper Circulation. During the consideration of this Bill in the Senate, Senator Howe, of Wisconsin, said: "To continue borrowing of our Banks, and borrowing coin, is impossible. They have not the coin to lend. * * The Government may be able to borrow of the Banks, but the Government cannot borrow specie of the Banks. If it borrows anything of them, ir must borrow, not their money, but their promises to pay money. Nothing is more certain than that, whatever our wishes may be, it is impossible to command the revenues in coin. We must rely mainly on a paper circulation ; and there is another thing equally certain, which is, that that paper, whoever issues it, must be irredeemable." Spaulding' s Letter to the Comptroller of the CurretKy. The Hon. E. G. Spaulding in a letter of January 22d, 1867, to the Hon. H. R. Hubbard, Comptroller of the currency, said: "I have watched with a good deal of interest, the various plans brought forward in Congress, in relation to the National Finances, and amendments to the National Banking law. * * The Secretary will, no doubt, by a moderate and pru- dent course of contraction, endeavor to keep the business and industry of the nation in a proper condition; in some degree check wild speculation, gradually reduce prices, and bring Greenbacks and national currency nearer the specie standard." * * "It seems to me, that the Act of April 12th contains all the power for contracting the currency, which is necessary to bring the business of the country back to the specie standard, as it was before the rebellion. It may take three years, five years, or even ten years to accomplish that result. Whenever the old uniform standard of gold and silver is reached, and prices and the business of the country are again based thereon, National IBanks will take the place of State Banks in the issue, circulation, and redemption of the currency. * * It was never intended by the originators of the legal tender Acts, that the issue of an irredeemable paper currency should ever become the permanent policy of the Government." "All the advocates of the legal tender Act, while it was pending in Congress, based their arguments upon the necessity of its passage, as a temporary relief to the Treasury during the war, and not as a pei-manent policy of the Government. On the contrary, the National Banking law was advocated as a permanent system of national currency. The State Banks * * gaye up their State organizations with great reluctance. But, in con- sequence of the law, which taxed State circulation out of existence, the State 42 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. Banks were obliged to come under the National Banking law for self-pre- servation, a law, which on its face, was to continue for twenty years," only. The National Banks did 7iot Aid the Government. On pages 187-88, of Spaulding's second edition of his " Financial History of the War," he saj's: "No National Bank currency was issued until about the I St of January, 1864. After that time it was gradually issued. On the ist of July, 1864, the sum of ^25,825,695 had been issued; and on the 22d of April, shortly after the surrender of General Lee, the whole amount of National Bank circulation issued, to that time, was only ^146,927,975. It will therefore be seen, that comparatively little direct aid wa.s realized from this currency until after the war." On page 28 of the Appendix, Spauldingsaid: "The avowed policy of the Government is to retire the legal tender Greenback currency, issued durmg the war, and bring the business of the country back to a gold standard. * * Whatever measure will aid in promoting the healthy and legitimate business of the country, during the process of contraction, will be of service to the Government and the people." How the Bankrupt Bankers were Enriclied. The issue of legal tender Notes, not bearing interest, and of Treasury Notes bearing interest, enriched the bankrupt Bankers, together with the "cunningly devised scheme ' of a premium on gold coin, held by the sus- pended Banks, which enabled them to get one dollar of U. S. Bonds, in 1863-64, with less than fifty cents in gold coin. The Bonds thus obtained were deposited with the U. S. as security for the National Bank legal tender Notes, loaned to them to speculate with. On February igth, 1863, the Hon. E. G. Spaulding, in his speech in favor of the U. S. Bank Bill, said : " 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 6 and 7 per cent, interest. We give to the Banking Associations, the in- terest on the national currency, issued [to them and then] by them, as an inducement to them, to form these Associations." * * "This national circulation is their money, owned by such Associations, like any other Bank Bills. They may be loaned to the people, or to the Government, like any other money belonging to the Bank; and when loaned, the Banks get 6 or 7 per cent, interest for its use. The Associations also draw the interest on the Bonds, previously hypothecated, with the Treasurer. In this way, the Banking Associations get 10 or 12 per cent, gross interest per annum [and also exemption from taxation on the Bonds, which is equal to about 2 per cent, more yearly], and the Government pays 6 of it on the Bonds sold to the Associations, and which are hypothecated with the Trea- surer; as security for the loan of the National Bank Notes, made legal ten- ders or 'receivable at par for all internal taxes, and all other dues to the Government, except customs, and payable to all creditors of the Govern- ment,' except for the principal and interest on the Bonds." THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 43 The " Specie Basis, or Gold Standard.^' — Its Purpose 168. Q. What did the Hon. E. G. Spaulding mean when he spoke of bringing "the business of the country back to the specie or gold standard," by contracting the money, and currency or circulating medium of the country? A. The National Bank Act provided for the organization of what are called "Gold Banks." Each of such Banks is permitted to issue four dollars of paper on each dollar of gold coin, that each Bank claims to have in its vaults, as a basis, to give credit and circulation to their Notes prom- ising payment on demand in gold. During a money panic in California these so-called "Gold Banks" being unable to redeem their promissory Notes in gold, locked their doors on their creditors. If they had had the "basis" required by law, they could have paid only 25 cents on the dollar of their promissory Notes, for which the public had paid them 100 cents. As Senator Howe said: "It is a pleasant fiction to call them redeemable; it is an agreeable fancy to think them so;" but past experience has shown that it is best "to have done with shams, and to deal with realities." The further meaning of the term "specie or gold basis or standard" is to make all legal tender U. S. Notes and National Bank currency redeemable on de- mand in coin, in order to limit the volume of them, by the volume of a limited "basis;" in order to limit the circulating medium, and thus compel the business of the country to be done with time Notes, to be discounted by Bankers and Bill-brokers. It is evidently a cunningly devised scheme to keep money out of the hands of the people and thus compel wealth-producing business men and wage-workers to pay tribute to the non-producers of wealth; some of whom honestly admit that it is a ruinous system, and that it should be put down, by establishing the system of buying and selling with full legal tenders or money, which redeems itself by use, whether it is composed of paper or coin. Beware of the so-called "specie basis system or gold standard," as it means a contracted and constantly contracting currency, in order to periodically produce money panics and crashes, to concentrate, or to "ac- cumulate" the increased wealth of the country in the hands of the non- producers of wealth. The Resolution Favoring Contraction in i86£. 169. Q. The Hon. E. G. Spaulding, in his letter of January 22d, 1867, to the Comptroller of the Currency, speaks of the contraction of the legal tenders or money then going on, in order to bring the business of the country "back" to the specie standard ; that is to say, to the sole use of a limited amount of Bank currency. What Act of Congress authorized this policy ? A. On the i8th of December, 1865, the House of Representatives in Congress passed the following infamous and stupid resolution, offered by Alley, of Massachusetts: " Resolved, That the House cordially concurs in the views of the Secretary, in relation to the necessity of a contraction of the currency, with a 44 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 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 possible." Messrs. Garfield, Hays, Jencks, Kelley, O'Neill, Randall, and the Hon. E. G. Spaulding, are found among those who voted for this ruinous resolu- tion. One hundred and forty-four members voted for it, and only six members voted against it, namely, Messrs. Baker, Cobb, Eckley, Harris, Smith and Thayer. Contraction Authorized on March 12th, 1S66. McCuUoch was a tool of those interested in Banks of Issue, and to enable him to carry out the foregoing resolution. Congress, on March 12th, 1866, passed an Act to authorize him to call in and destroy U. S. Notes, or "Greenbacks," not bearing interest, and also legal tender Treasury Notes bearing interest, in exchange for 6 per, cent. U. S. Bonds. This Act per- mitted McCulloch to call in and destroy g 10 millions of U. S. Notes, within six months, and $i^ millions per month thereafter. McCulloch actively carried on the work of contracting the circulating medium, under this Act, and as the money was withdrawn from circulation, forced credit was substituted. The buying and selling had to be done with time Notes, which so injuriously effected the interests of the vifealth-pro- ducing business men and wage-workers, as to compel them to denounce this infamous scheme of Bankers and Bill-Brokers. Congress, in January, 1868, was compelled to pass an Act prohibiting McCulloch from destroying any more U. S. Notes; but before this Act was passed he had destroyed so much of the legal tenders as to accomplish the main purpose of the Bankers and Brokers. The ostensible purpose of this contraction of the circu- lating medium was to enable the Banks of Issue to redeem their promises to pay on demand, with specie. Hozv Congress could have Restored Coin to Circulation in 1862. 170. Q. Was it in the power of Congress to have restored gold coin to circulation at any time, without any contraction of the circulating medium, and are the National Banks required to redeem their Notes in specie on demand? A. When the so-called demand Notes were no longer redeemable in coin, but were made legal tenders for duties on imports, equally with gold, they rose to an equal premium with gold. This fact proves that paper and coin will be of equal value, when they are made equal legal tenders. Congress could have restored specie to circulation at any time, by having made the "Greenbacks" or U. S. Notes legal tenders for duties on imports, which would have made the supply of money for that purpose, equal to the de- mand; and this would have destroyed the premium on gold and would have restored it to general circulation. What took the Premium off of Gold Coin. The coinage of silver dollars, made equal legal tenders with gold, from and after 1878, supplied the demand for money to pay duties on im- THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 45 ports, which took off the premium on gold, and restored it to circulation, not by contracting the circulating medium, but by increasing the amount of it, receivable for duties on imports. How the Money Panic and Commercial Crash of iSyj was Produced. The object of contraction, begun in 1866, to bring the country "back" to "specie basis or the gold standard," was to limit the circulating medium, and force business to be done on credit, with commercial paper. A limited "basis" for the redemption of promissory Notes on demand, must necessarily make a limited circulating medium or currency. The contrac- tion commenced in 1866, ruined thousands of wealth-producing business men, and threw thousands of wage-workers out of employment, to enrich Bankers, who were bankrupts in December, 1861; but it did not re-establish "specie basis" for Bank currency. The National Banks have not been required to redeem their Notes in specie. The People are not Compelled to receive National Bank Notes. The National Bank Notes are made redeemable in "Greenbacks." Whenever the public generally call on the National Banks to redeem their promises to pay on demand in "Greenbacks," they will again suspend and lock their doors on their creditors. The National Bank Notes are not legal tenders for private debts, dues, and demands, and the public may at any time refuse to receive them as such, and a general refusal to do so, would at any time compel these Banks to again suspend payment of their Notes, and thus end the conflict between Bank currency and U. S. money. The Effect of a Refusal to receive National Bank Notes. A general refusal to receive the National Bank Notes for private debts, dues, and demands, would instantly increase the demand for silver, which would increase its value, as one of the products of the United States, and compel the British Government to pay more for silver to supply India. When the law is repealed, which permits the National Banks from putting in circulation any Notes promising payment in lawful money on demand, the conflict between U. S. money and Bank currency will cease; the latter of which is periodically so ruinous to wealth-producers in the United States. The Amount of Money and Currency in use in September, 1865. 171. Q. At the close of the war on the Southern States, in April, 1865, what amount of legal tenders or money, and of circulating medium, had we in circulation in the adhering States? A. We had in circulation in the adhering States, on September ist, 1865, ,:^ 1,996,678,770, exclusive of coin, or of gold. Adding the gold coin in issue to this amount, made over two billions of circulating medium in use on September 1st, 1865, which enabled the business in these States, to be carried on mainly with cash. Tlu Amount of Circulating Medium in i8yj. ■172. Q. On December ist, 1873, what was the amount of circulating medium? 46 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. A. The amount of money and currency in circulation in the United States on December ist, 1873, was only §775-679.685, showing that the contraction of the legal tender paper money and currency from December 1 8th, 1865, to December 1st, 1873, was gi, 230,999,085. This conspiracy of Bankers to again get control of the circulating medium of the United States, in order to control the business and politics of the country, was financially the ruin of thousands upon thousands of wealth-producers, caus- ing the idleness and distress of thousands of women and men, who required employment to earn bread, and who were deprived of the means of earning subsistence. T/te Cause of Money Panics. 173. Q. What amount of contraction of the circulating medium from time to time (from 1811 to September, 1873) caused the several money panics, commercial crashes, and Bank suspensions which took place during that long period of time, causing the financial distress and ruin of wealth- producing business men? A, The money panic, crash, and Bank suspension of t8i6 to 1820, was caused by a contraction of only ^23 millions; that of 1837 to 1843, was caused by a contraction of only ^83 millions; that of 1854 to 1858, was caused by a contraction of only $\g millions; that of 1861 to 1862, was caused by a contraction of only $2^ millions; but it required a contraction o*' over ,^12 hundred millions, from 1865 to 1873, to produce the money panic, fearful crash, and Bank suspension of September, i_82'3. The United States Banks in 1873 could not redeem their Notes in "Greenbacks," and were compelled to suspend payment of their debts. Why there was no Money Panic from 1862 to i8yj. 174. Q. Why was there no money panic and crash from February, 1862, until in September, 1873? A. Simply because Congress was compelled to issue legal tender U. S. Notes to carry on the war against the Southern States, until the vol- ume of them enabled wealth-producing business men to do business mainly with money, instead of with time Notes, which placed them out of debt, and out of the danger of money panics and crashes. The Object of Contraction from 186 J to 18 ^j. The contraction from 1865 to 1873 was made to bring us "back to the specie or gold standard," or to the forced credit system of business, to promote the interests of Banks of Issue and Bill-Brokers ; as fast as the money could be withdrawn and destroyed, forced credit was substituted for cash, and when the volume of time Notes had swelled to "the bursting point," then came the panic and crash of 1873; and the conspirators who were bankrupts in 1861, became the millionaires of 1873, by a cunningly conceived device to rob wealth-producers. T/te Conspirators kitew the Effects of Contraction. 175. Q. Were McCuUoch, Secretary of the Treasury of the United THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 47 States, and the Hon. (?) E. G. Spaulding aware that a contraction of the circulating medium, begun by them in 1866, would produce a money panic and crash ? A. The Hon. (?) E. G. Spaulding, on January 22d, 1867, in his letter to the Comptroller of the Currency, said: "The Act of * * the 12th of April last, * * authorizes the Secretary of the Treasury * * to contract, tut he will no doubt * * not retire Greenbacks or compounds, any faster than it can be done, without materially disturbing the legitimate business of the country." In his letter of December 4th, 1866, to Secretary McCul- loch, he said: "You have, no doubt, now, to a large extent, control of the finances of the country, and I think, that you will, of necessity, contract moderately, * * . There may be occasional spasms and tightness for money * * , but generally I shall look for plenty of money, for, at least, a year to come." * * Secretary McCuUoch, on December 7th, 1866, replied to Spaulding as follows : " My object has been to keep the market steady, and to work back to specie payments, without a financial collapse. I shall act in the future, as I have in the past, with great caution, and attempt no impracti- cable thing." The Further Destruction of Greenbacks Prohibited in 1868. In January, 1868, Secretary McCulloch was prohibited from contracting and destroying any more legal tender U. S. Notes; but the power to call in and destroy the legal tender Treasury Notes, bearing interest, and com- pound interest-bearing Notes and destroy them was continued to him, and it was by the exercise of this power, that he caused the money panic and crash of 1873. Why no Banker should Control the Treasury of the U. S. 176. Q. Did not Congress, at an early day, pass an Act prohibiting any merchant from being appointed Secretary of the Treasury ; and if so, is it not more important that Congress should pass aa Act prohibiting any Banker or Broker, or dealer in commercial paper from being appointed Secretary of the Treasury ? A. Congress, at an early day, passed an Act prohibiting the ap- pointment of any merchant as Secretary of the Treasury ; and the appoint- ment of a Banker or Broker or dealer in commercial paper to that office, is not only contrary to the spirit of that Act, but it is vastly more injurious to the interests of wealth-producing capitalists and of wage-workers, than the appointment of a merchant to that position ; and it is the duty of Con- gress to pass an Act prohibiting any Banker or Broker, or dealer in money, currency, and forced credit, from being appointed Secretary of the Treasury. The Treasury should again be made Indepe^tdent of Banks of Issue. 177. Q. Is it not the duty of Congress to again pass the Independent Treasury Act ? A. The Treasury of the U. S. should again be made entirely inde- 48 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. pendent of the Banks ; and nothing but U. S. money should be received into the Treasury of the United States. This would keep coin in circula- tion. No public moneys should be deposited in any Bank. Why Banks of Issue are Dangerous histitutions. 178. Q. Are Banks of Issue and their Notes promising payment on demand in " Greenbacks" of any use or advantage to the Government of the U. S., or to the wealth-producing interests of the country? A. They are not. The National Bank Notes are of incalculable injury, both to the Government and to the wealth-producing interests of the country. They are mere evidence of debts due by the Banks to the public, on which they compel the public to pay them interest. The promise to pay their debts on demand in lawful money, is an impossibility, and is made to give confidence and credit or circulation to their promissory Notes ; and to allow only a very limited amount of currency to be in circulation. No Bank should be permitted to issue or circulate any Note, promising payment in lawful money on demand, and be specially authorized by law to be used as a legal tender for public debts, dues and demands. These Notes give to the Banks that issue them, control, to a certain extent, over the business, and also over the politics of the country. It is a very dan- gerous power to confer, by law, upon any corporation, or upon any indi- vidual. A redeemable currency, promising redemption on demand in specie, or in lawful money, is a contracted currency; and it is the sole cause of the periodical money panics and commercial crashes which rob and ruin wealth-producers. How to Make the National Banks merely Banks of Discount, &c. 179. Q. How may the National Banks be reduced to the condition of Banks of discount, deposit, and exchange, without reducing the volume of currency in circulatiori ? A. Simply by making the National Bank Notes legal tenders for private debts, equally with the "Greenbacks," and by paying the National Banks in " Greenbacks," the remaining portion of the market value of the Bonds deposited by them, and then destroy the Bonds fully paid, and as fast as the National Bank Notes are received into the Treeisury, destroy them, and issue in lieu thereof U. S. Notes. How to Prevent the Circulation of State Bank Notes. 180. Q. When the National Banks are no longer permitted to issue and circulate Bank Notes, how may State Banks be prevented from issuing and circulating Bank Notes ? A. The circulation of State Bank Notes may be prevented by en- forcing the Act of Congress, which taxed them out of circulation, or, if necessary, the tax may be so increased, that the State Banks could not derive any profit from their use. What Law makes Money. 181. Q. Money being what the law makes a legal tender for public and THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 49 private debts, dues, and demands, is it necessary that it should be made of any particular material or commodity, possessing in itself intrinsic or com- mercial value? A. Certainly not; as it derives its value from the law which makes it a forced legal tender, which the receiver of it can compel another to take for what it cost the person who received and tenders it, it is immaterial what commodity it is made of, provided, it is convenient to handle. Why the use of Gold and Silver as Money should not be Abandoned. 182. Q. As silver and gold coins made legal tenders or money, are not as convenient to handle as legal tender U- S. Notes, and are very costly metals to obtain, would it be a wise act of sta' smanship to abandon their use as money? " -':. A. No. Silver and gold are products of the United States; they derive their chief value from their use as money, by all civilized nations, , and, therefore, to abandon their use as money in the United States, would be to cheapen two of the principal products of our country, and enable the British Government to obtain silver bullion at a yet lower rate than at present, to supply its subjects in India with silver, where gold is not. used as money, and where a ton of it would not sell for a pound of silver, during a money panic and commercial crash. Why an Ounce of Gold is more Valuable than an Ounce of Silver. 183. Q. Why is an ounce of gold 15 or 16 times more valuable in market than an ounce of silver? A. Because of the great difference in specific gravity, as may be . seen by comparing a silver dollar, which contains 37 ij^ grains of pure silver, with a gold dollar which contains only 233^ grains of pure or 24 carat gold. The difference in bulk is very great between the two dollars, which makes the great difference in value between an ounce of silver and an ounce of gold. A 20 dollar gold piece or coin is but a very little larger than a silver dollar. The money which is most convenient to handle, is the most highly esteemed; therefore, U. S. Notes made equal legal tenders with gold and silver, are preferable to any metallic money whatever. U. S. Notes made legal tenders for duties on imports, pass in Europe as bill of exchange, and command a premium over gold equal to half the rate of ex- change. How the Federal Government may obtain Gold and Silver Coin. 184. Q. If U. S. Notes were made legal tenders for duties on imports, and for all other debts, dues, and demands, public and private, except for the interest and principal of the U. S. Bonds, which are made. payable in coin, how could the coin be obtained to pay the interest and principal on these Bonds? A. When Congress passes an Act authorizing any person to de- posit gold and silver coins or bullion with the United States in exchange for full legal tender U. S. Notes for ^i and upwards, the Government of the 4 ;',{0;'i'. W I' V Oi' MM XA \Vi ;; v/ vo;i:< UM-.^. ■;.;:! 01 19S24 I I I ii :i I •/ •■ ,i i I i' Y 50 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. United States will be furnished with all the coin it may require for any purpose. How to Handle Gold and Silver inore Conveniently. 185. Q. How could the use of gold and silver coins as money be made more convenient to handle, and much of the expense of coinage be avoided? A. By casting the greater portion of gold and silver bullion into bars, ingots, and disks, with the number of grains of pure metal stamped on the one side, and the number of grains of alloyed metal on the reverse side, and made full legal tenders; large quantities of gold and silver could be more conveniently handled or carried, and it could be more rapidly counted or calculated, and much of the expense of coinage might be avoided. TJie .Original Mode of Using Gold and Silver as Money. 186." Q. What was. the original mode of using gold and silver as a medium of exchange, or as money? A. By weight at their market value. No Commodity sltould be- a Legal Tender at a Price Fixed by Law. 187. Q. Would any Statesman, at this time, propose to make Tobacco or Cotton a legal tender, at a fixed price per pound ; and if not, why not? A. Because experience has taught us, that commodities which are liable to greatly fluctuate in value, by great changes in supply annually, when used as money, should be made legal tenders by weight or measure, at their market value. i88. Q. By making grains of gold and silver legal tenders at their market value, would it not give us dollars of the commercial value of 100 cents to the dollar? A. It would. How to make a Unit of Value and Money of the World. 189. Q. By making an ounce troy of pure silver, the unit of value, and by making grains of gold and silver legal tenders, by weight, at their market value, would we not soon learn how to calculate the value of 100 cents or of the dollar, which is the U7iit of Federal money ? A. We would; and if all Nations were to adopt the ounce troy of pure silver as the unit of value, and make grains of gold and silver legal tenders at their market value, this would bring us as near to a money of the world as we will ever arrive at. Wliat tlie Advocates of U. S. Money desire. 190. Q. Do the advocates of U. S. money who are opposed to Bank currency, demand dollars which will uniformly obtain the same amount of intrinsic or commercial value in exchange for them? A. -Justice to debtors and creditors, under contracts to pay and receive dollars, demands that their quantity should be determined by a unit of value, which will at all times give neither more nor less than the unit of Federal money. To do this, a unit of value must be established bv law THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 5 1 which will at all times give both debtor and creditor a dollar which will obtain the same amount of intrinsic or commercial value in exchange for it. This is the demand of the advocates of " Greenbacks " or of U. S. money of any kind, in opposition to Bank currency, or to a redeemable currency of any kind. U. S. Notes obtain Redemption by Use. 191. Q. How do full legal tenders or U. S. money obtain redemption, and what are they based upon, and how may they be called in or be retired from circulation at any time? A. Legal ' tenders obtain the only redemption which they require, by use. The person who receives them in payment of a debt, redeems them, or the person who receives them in payment of anything purchased of him, redeems them, they are based upon the entire property of the country, and upon the taxing power of the Government; and they may be called in or be retired at any time by taxation. Why tite Circulation of U. S. Notes is Opposed. 192. Q. Why do the enemies of a Democratic representative, or Re- publican form of Government, oppose U. S. money, composed of coin or bullion and of U. S. Notes, which redeem themselves by use, and contend for Bank currency and a standing Army, and for "National or State Guards"? A. Air Monarchies and Aristocracies are bottomed on corruption and fraud, and can only be maintained by force. Banks of Issue, which control the business of a coun,try, and build up monopolies, are the corner- stone and foundation of a privileged class of persons ; therefore, tlie conflict between Democracy or genuine Republicanism, and the would-be Aristo- crats and Monopolists, or between an oppressed people and their oppressors, who rely upon Banks of Issue, and a standing Army, and upon " National or State Guards " to obtain and maintain their advantages over au oppressed people. How and Where to Strike. 193. Q. How and where may an oppressed people "strike" an effectual blow to destroy Monopolies and a monied Aristocracy? A. At the ballot-box; and no where else, effectively. Beware whom you vote for, to repeal oppressive laws and to enact good ones. The Object of Contracting the Circulating Medium. 194. Q. What periodically causes money panics and commercial crashes which are so ruinous to the producers of wealth? A. The so-called " specie or gold basis " system of Bank currency, is the sole cause of money panics and crashes. Specie being limited in amount; any currency based on it for redemption, must be limited by the basis. This compels business to be carried on under the forced credit system, or with time Notes, to be discounted by Bankers; as "the man who is com- pelled to sell on time must buy on time or go out of business; and as Bank 52 THE OBJECT AND DUTY OF CIVIL GOVERNMENT. currency is a contracted and constantly contracting currency, wealth-pro- ducing business men are at the mercy o Bankers and Bill-brokers, and are in constant danger of being pecuniarily ruined by a stealthy contraction of Bank currency, to produce a money panic and crash, to enable the non- producers of wealth to accumulate the increased wealth of the country in their hands. How to Make the Industries Active. 195. Q. Would the payment of the overdue Bonds and the purchase in open market, of those not due or payable, and the substitution of full legal tender U. S. Notes for Bank cunency, and the prohibition of Banks of Issue, make the industries active; and would the cash system of business forever prevent money panics and crashes? A. By putting the Federal debt into U. S. money, and by prohibit- ing Banks of Issue, it would make the industries active; and by putting enough money into circulation to establish the cash system of business, it would forever prevent money panics and commercial crashes. Under the cash system, no man could be broken down by the failure of any other per- son. Failures in business would seldom occur, and the business of the country would go on actively and prosperously, and there would be a dif- fusion of the increased wealth of the country in the hands of the wealth- producers, who would grow into wealth more rapidly than the Bankers, or mere dealers in money who never invest a dollar in wealth-producing labor, and who never risk a dollar in wealth-producing business, but who rely on purchasing such legislation as enables them to concentrate or accumulate into their hands the wealth produced by others. Who is a Genuine Democrat or Republican. 196. Q. Can any man be a genuine Democrat or Republican who op- poses making U. S. Notes equal legal tenders with gold and silver, or who opposes substituting them for Bank currency, and who advocates Banks of Issue, either State or Federal? A. A genuine Democrat or Republican is a person who works to promote the public good. A genuine Democrat under the American sys- tem of Governments; — State and Federal — is a Republican, and a genuine Republican is a Democrat. No man can be a genuine Democrat or a Re- publican who opposes full legal tender U. S. Notes and their substitution for Bank currency, or who advocates Banks of Issue, or who in any way fa- vors such legislation as has a tendency to build up a monied Aristocracy, which is the meanest and most oppressive system of government ever con- ceived. JVky Silver is More Useful than Gold. 197. Q. Is not silver money more useful to the mass of the people than gold money? A. As silver can be tendered in coins of pieces of less value than gold coins or pieces, it is a more useful metal, as money, than gold; and it THE OBJECT AND DUTY OF CIVIL GOVERNMENT. 53 is therefore the most popular with the mass of the people, who seldom have much surplus money to retain at any one time. How to Make an UncJiangcable Unit of Value. 198. Q Would it unjustly effect a unit of value, by making grains of gold and silver legal tenders at their market value ? A. K unit of value is arrived at, only by ascertaining the market value of grams of gold and silver, and when they are made equal legal ten- ders, m coins, at denominational values, it is necessary to fix a ratio or the relative value between an ounce troy of gold and of silver; therefore ten- dering grains of gold and silver, by weight, at their market value, would avoid any necessity of establishing, by law, a ratio between gold and silver. The Effect of Improper Ratios. 199. Q. What effect has improper ratios had on the circulation of gold and silver coins ? A. From 1792 to 1834-37, the ratio was 15 ounces of silver for an ounce of gold. This drove gold to Europe, where an ounce of gold was worth 151^ ounces of silver. Gold from 1792 to 1834-37, was under- valued by law in the United States. In i834-'37 the ratio between gold and silver was fixed at 16 to i nearly, which overvalued gold, and under- valued silver, and this brought gold back to the United States, to get the premium on it, and silver went abroad to get the premium on it. How to Protect American Industry. 200. Q. How can the cost of producing be cheapened without imposing unjust wages on labor? A. By making par money so plenty as to make more lenders than borrowers of money, which will lower the rate of interest on money that employs wealth-producing labor ; and thereby the cost of producing will be cheapened, without imposing unjust wages on the laborer. It will benefit both the wealth-producing capitalist and the wage-worker or operative. How to Enable the American to Compete with the European Manufacturers. 201. Q. Can American manufacturers be enabled to compete with the European, without taxing consumers to effect it, and without imposing un- just wages on wage-workers? A. When full legal tender, or par money is made so plenty that there will be more lenders than borrowers of money, the rate of interest on manufacturing capital will be as low in the United States as it is in Europe, or lower; when manufacturers in the United States will be enabled to pro- duce as cheaply, if not more so, than the European manufacturer, without imposing unjust wages on the American opeiatives, who are capable ol operating more intelligently and of performing more work in the same * number of hours, than the European operatives, which will make this country a market to which all people will come to buy, and thus obviate 54 THE OBJECT AND DUTY OF CIVIL GOVERNSIENT. the necessity of a tax on consumers, to protect American manufacturing capitalists and wage-workers. H