UNIVERSITY OF ILLINOIS LIBRARY Class Book Volume H G t 5\o^ EG0UOfi/1IC8 *~y — its Ciu^ &*rr/ C.&^a <£&*-*_; £&% — t, ^ jC; *sc~*~ ’ V / /'fv&r^^V g/r Ss S>&~ yit/2— ’ cy*± g- ? c^t -c^ <•/>« ' - J' • >V £ S 4. Cri^t^ (f/ci w<0£ A* -- y^£^t- V ' ^ / / ^ >/ Cx^^St 4 tf £xx "y " l ^»— — Sennit) »t <^^^c*i-4j Ctrt ^ ^ yi/yr- Y^iTA** /^7 <^( ^4* y / / */c /&. 4^i>tx/ ^y /t /£r 4<*a ^4/ * ^ ? s/'< ^ / yyy / 44, ^ ^ < C£ O ^ ^ / /A n.A-^ y%x z&^Lsi c&Jc ( ^ */le> tf^c// / ^ Aj /»«f /* ^ etf j^ Y/ * x- ^Ae^t-c/^ S* &~s/ry1?£i /c4{* e * y /^<»j /-c^-^ &Y Si^mYp ' \ \> / jl c AAXj A? t a/' ^'- /- */ /v ft • * N ' ’» *V N ^ ^ • * v A* v v \ ' "N . 9 The silver of the world is estimated to amount to over five thousand millions. One per cent, on this amount would be fifty millions. During the last year the value of silver in England fluctuated from about 45 to 55 pence per ounce, or about 20 per cent., and 20 per cent, on five thousand mil- lions would be seven hundred and fifty millions. While it is not to be supposed that the operators realized this immense amount, still these gentlemen have learned how to obtain profits much greater than could be realized on the amount that actually passes through their hands. The injurious tendency of demonetizing silver is most clearly seen in its effects upon the debtor and creditor classes, not only in this, but in other nations. The credit system is probably much more widely extended in our busi- ness relations here than elsewhere, and consequently laws that favor the creditor at the expense of the debtor more seriously and injuriously affect the masses. During the in- flation period, when prices were above the true medium, debts were contracted for every species of property at prices greatly above its true value, and when it began to decline, the demonetizing of silver accelerated the declen- sion with a twofold power beyond what would have been the natural result, and ruin and bankruptcy were nearly universal. Instead of attempting a sudden return to specie payment on even a gold and silver basis, time should have been given to liquidate their indebtedness without such uni- versal suffering ; but in direct opposition to a course so just and reasonable, the act of ’73 was passed, the ten- dency of which was to reduce values one-half below what they were before the inflation. Is it possible to conceive anything more unjust toward the debtor class than the passage of this act? But it may be replied that this law affected only the debt of the nation : the result is the only answer that need be given. The depreciation in value of every description of property, has been nearly or quite one hundred per cent., and the rapid declension in values commenced immediately after the passage of that law, and to that law it is mainly attributable. It has de- prived the people of half the ability to pay their debts which they believed they possessed when the debts were contracted. This plan of demonetizing silver is not purely or primarily of American origin. It is the highest concep- tion of the greatest financial intellect that the world has ever brought forth. A Rothschild might conceive and adopt 10 a plan which, by patient and wise measures, would, in centuries, result in the acquisition of hundreds of millions ; but this was a coup de finance which, at a single stroke, put thousands of millions into the coffers of the world’s creditors. The entire national indebtedness of the world is estimated to be about twenty-three thousand millions. National indebtedness is never paid in anything but money, and gold and silver alone constitute money. If sil- ver is demonetized, half of the money is struck out of exist- ence as such, and the gold alone is known as money, con- sequently the gold becomes doubly valuable, and public debts being payable only in gold are also doubly valuable. The creditors are benefited, but the debtors are to the same extent injured. The people are the debtors in this and all nations, and should seek relief where alone they can obtain it. The burden should be removed by those who have wrongfully placed it upon our shoulders. So far as America is concerned, a beneficent Providence has put it in our power to pay off the national debt, and at the same time develop all our vast national resources as rapidly as would be for our ultimate benefit. The land given us for our inheritance is so vast in extent, so varied in climate, so abundant in its productions, so rich in mineral wealth, so blessed with its means of intercommuni- cation, its rivers like threads of silver interwoven through- out our vast domain, and its thousands upon thousands of miles of railroad, binding us with bands of iron — the more than forty millions of active, intelligent people occu- pying that land — that when we reflect upon the advantages we enjoy, we cannot doubt that, with wise laws, we shall at no remote period assume that high position among the brotherhood of nations that these advantages entitle us to anticipate. Other nations are cumbered with much larger debts ; they are compelled to withdraw from productive employments a very large portion of their population to supply their armies and navies ; they are obliged to sup- port those armies and navies at large expense ; and, with the interest on their national debts, they can never look for- ward to the payment of the principal with any reasonable assurance that it can be effected. While America, on the contrary, in addition to all her other great resources, has laid away in the great store-house that a gracious Provi- dence has provided for us, precious metals, which, if drawn forth to the same extent that they have been for the last 11 few years, will, in a little over twenty years, pay off the entire national debt, and at the same time furnish a circu- lating medium adequate to meet all the business require- ments of the people. But as the act of demonetizing silver by an American Congress mainly affects American inter- ests, it is principally in this light that the subject should be investigated. I have endeavored to point out some of the many evils resulting to the debtor class from the act of ’73, arising from the great depression in values below their true me- dium, as a necessary consequence of it. To me, it ap- pears that remedial measures may be adopted, which will not only greatly mitigate them, but prevent their recur- rence in the future. It must ever be borne in mind that great and rapid fluctuations in values are to be deprecated in unmeasured terms ; and that fortunes acquired by other means than honest, intelligent industry and economy are wrongfully acquired. I am fully conscious that, in this view of the acquisition of wealth, I shall be opposed by all the stock-jobbing and gambling operators, as well as ring cliques , that exert such controlling influence in finan- cial matters at the present time, but I believe that all who are governed by principles of moral honesty will fully concur in my opinion. In former articles, I pointed out the means by which, as I thought, this could be accomplished ; but, without en- tering into as full an exposition of them as I then did, I will now simply indicate the main features of the plan I then suggested. The amount of paper circulation afloat on the 1st July last was a trifle short of seven hundred millions, and this, if made equal to coin, would be adequate to meet all the financial wants of the country — indeed, money has never been reduced to so low a rate of interest as it has commanded during the last year, showing con- clusively that we have all that our present necessities require. Nearly three hundred and thirty millions of this circulation is about fifteen per cent, better than coin, as it represents about $366,000,000 of bonds, worth a premium in gold above their present par value ; about $370,000,000 is in greenbacks, at present below gold only about five per cent. To make this equal to coin, I would suggest the propriety of gradually withdrawing annually a portion of it, and substituting therefor 3.65 interest-bearing scrip, of the denomination of $10 and upward, payable in coin 12 and redeemable at the expiration of ten years from the date of its issue, or convertible into bonds bearing the same rate of interest, and payable at a period beyond that of any present outstanding indebtedness. It might be de- sirable that these bonds should be issued with a proviso that they might at the option of the holder be surren- dered, and similar scrip again issued in their stead, if the demand for currency should at any future period be greater than the supply. This scrip would really be more valuable than coin, for while lying idle it would be ac- cumulating interest, and those desiring to lay by small amounts for future use would prefer it to making deposits in savings institutions, being a safer and better invest- ment, while it would result in giving the masses of the people an interest in our national existence that they do not now generally feel, and it would have a tendency to bring down the rate of interest on our national indebted- ness to a lower standard than is now paid. In order to enable the banks to resume specie payment without the risk of again being compelled to suspend it at any future period, I would suggest, if they require it, that the Government should pay them the ten per cent, of the par value of the bonds withheld, as security to the bill holder for the ultimate redemption of the currency issued on those bonds. These bonds, instead of being below par in gold as at the time the currency was issued, are now worth 15 or 20 per cent, in gold above their par value, and the Government would be perfectly secure against loss by this act of justice to the banks. The Gov- ernment had on hand on the 1st of March nearly eighty- seven millions in coin, and it would require but thirty- seven millions to pay the banks this 10 per cent., which would enable them to resume specie payment at any time. Indeed, our late President, in his message to Con- gress, under date of February 3, said he “ believed the “ time had come when, by a simple act of the legislative “ branch of the Government, this most desirable result “ can be attained,” and this, in his view, could be accom- plished on a gold basis. How much more readily on a coin basis of silver and gold combined. The annual product of bullion in gold and silver from our mines will not vary greatly from ninety millions. Our interest-paying na- tional indebtedness is a trifle less than $1,700,000,000, bearing an average interest of about 5^ per cent. This 18 indebtedness is being reduced at about the same rate that I should think it would be advisable to issue 3.65 interest-paying scrip, so that while we reduced the rate of interest, we should not reduce the volume of currency so as to affect values to the unnecessary injury of the debtor class. I have not the data to show the exact amount of our bonds held by foreign nations, but, from the best sources of information I am able to obtain, I assume it to be about $700,000,000, leaving about $1,000,- 000,000, held in this country. The interest on the foreign indebtedness would be about $38,000,000, and on that held in this country about $55,000,000, making altogether about $93,000,000, or $3,000,000 more than our entire product of gold and silver united. The bullion produced in this country is in relative value about equal ; the sil- ver, at present, perhaps predominating. Now, if gold alone can be used in payment of our bonds, from what source are we to derive the means of paying the interest and principal of our national debt ? It may be replied, From the sale of our silver and the imposts on foreign productions. But the time is rapidly approaching when we shall manufacture our own raw material, and not re- quire the manufactures of other nations, upon which duties can be imposed ; and what legitimate reason can be assigned why silver should be depreciated in value ; that the holders of our bonds should be enriched by the depreciation of an American product of such great value ? Or, why should silver be demonetized, except it be to form a commodity in which gambling speculators may make fortunes by creating unnecessary fluctuations in values ? But if the bi-metallic currency is adopted, our mines would produce nearly or quite enough to pay the interest on our national debt, and leave over fifty millions annually to be added to our circulating medium, which would be equal to any demand for currency that the business in- terests of the nation might require. Through a combination of circumstances, we have now the best banking system the world has ever known ; giving the bill-holder perfect security, and establishing a currency of equal value in all sections of the country ; saving to the people millions that, under any former sys- tem, would have been required to be paid for exchanges, so that it should be the object of all of our statesmen to preserve it, in all its essential features, as near its present 14 character as possible. A permanent monetary system, beyond the reach of sudden fluctuations, established upon a specie basis, and adequate to all the necessities of the varied business relations of the people, is the one thing, beyond all others, required for the full development of the vast resources of this great nation, soon to be, in all that constitutes real greatness, the mightiest of the earth. To be assured of this, we need only to look at the conti- nent of North America, which, from its locality, and the natural tendency of self-interest, will, at no distant day, be united under one republican government, combining every variety of climate with productions, or capacity to produce every article that the wants of mankind require ; peopled with more than fifty millions of active, intelligent men, with lakes, rivers, canals, and railroads binding us together as with bands of iron, rendering communication with every part easy and rapid, all caste destiwed, placed on one common level, opening the pathway to honor and usefulness alike to all ; where moral worth and mental culture should alone be the talisman to secure distinction; where the different races of men may be united in one homogeneous mass, benefiting and aiding each other, then the motto that so proudly floats on our banner would be verified to the world. I have said that the one thing to be desired for our commercial prosperity is a monetary system that secures us a currency beyond fluctuation in value ; and this can only be secured by remonetizing silver at the earliest practicable period. It is not necessary or desirable that our circulation should be solely a metallic one ; indeed, for all large transactions, that which is its true represent- ative is far more convenient and preferable. In with- drawing the greenbacks, those of a less denomination than five dollars should be first retired ; and the banks also, at no remote period, be required to retire all of a less denomination than five dollars ; while, in coining gold hereafter, a large proportion should be quarter eagles and three-dollar pieces. Silver coin of a less denomina- tion than one dollar should be the true representative in weight, that it purports to be in name, of the standard dol- lar. With money of an unchangeable value, the ability to produce fluctuation would be greatly lessened, business men would be better qualified to form correct estimates of true values, manufacturers and mechanics would mu- 15 tually be better able to form just conceptions of what each contributed to the value of the article manufactured, and in like manner the value of every product could be more correctly estimated and better understood. In a govern- ment like ours there should be no class legislation — that which benefits one class must surely injure another. The act of ’73 alone benefits the creditor class, and especially the bond-holders, and to whatever extent it benefits them it injures the people who must pay the bonds, and the debtors whose property has been wrongfully depreciated below the true medium value by the effect of the act. It is not so important to us, as a nation, whether gold or silver, or both combined, should be the basis of a cir- culating medium, as it is to ascertain and secure one as speedily as possible that will be free from all fluctuations in the future. Neither gold alone nor silver alone, ade- quate to this end, is attainable by us ; but a kind paternal hand has placed within our reach enough of both united to secure this most desirable object. Let silver be remon- etized and made a legal tender to the same extent as gold, and the problem will soon be solved. From conversation and correspondence with men of whose honesty there can be no doubt, and of whose intelligence there can be no question, I am fully satisfied that many have been led to advocate the demonetizing of silver from the purest mo- tives, believing it would result in good : but still I have never heard a reason assigned for the adoption of the measure, or a way pointed out by which the good might be secured, that, to my mind, was a justification of the measure, or even a palliation for the evils that have re- sulted from it. Money is the Archimedean lever that moves the world for good or evil, dependent for its influence upon the ful- crum on which it rests. If on the Christian principle of doing unto others as we would that they should do unto us, then it blesses both the giver and receiver, but if on cupidity “ it is the root of all evil ” and moves the world toward the destruction of all that is estimable and en- nobling in man. There are epochs in the history of all nations that mark events of such importance, that, like birth, marriage, and a change from this to a higher existence in the lives of individuals, are referred to as incidents that exert great influence in the formation of character, and determine in 16 a great degree the worth of the individual or nation whose merits we are considering. Washington is truly designated the Father of his Country. Lincoln destroyed caste , and opened the way to a union of the people, and now Hayes is given us to make broad the road to a na- tional existence so much higher than we have ever known that it can only be compared with life on earth to the life beyond. When we but dimly look at its future destiny as the home of man, enjoying his primeval rights, where the oppressed can find a home free from the despot’s power, where war’s destroying scourge shall never again be felt, where nation shall not rise against nation, and the uncon- trolled ambition and pride of rulers shall not result in sweeping thousands of thousands from the paths of useful- ness into a premature grave ; but where men of all classes and conditions can meet as of one blood and harmoniously co-operate in a mighty effort to render the Continent of North America and the surrounding islands a nation where right, not might, is power, where justice reigns unbought and where true liberty is enjoyed. With judicious legislation and the co-operation of the people with the course marked out by the President in his inaugu- ral and more clearly developed in his efforts to harmonize and unify the people of different sections with each other, a career of prosperity will be opened to America such as should unite all in one great effort to secure it. The day, as I have before said, is not distant when this nation shall become the manufactory for the world. The laborers will come from all nations, and the raw material will here be converted into fabrics such as our own people and the people of the whole earth require, and freed from the unnecessary expenses which the nations of the old world are compelled to expend for their maintenance, we shall soon be in a condition to commence the career that can end only in rendering us the greatest nation that the world has ever known, and it appears to me that the same beneficent power which gave us a Washington and a Lincoln in our hour of need has given us a Hayes in our present emergency, and that these three will constitute a trinity dear to the heart of every American, and honored by the world as those chosen by the great Ruler to perfect the great plan he had in view when he framed the earth. Chicago, April 16, 1877. SAMUEL HOARD.