The Currency Question

Sept. 23d, Schurz received the following telegram from Indianapolis:

“Can't you help redeem Indiana in a square fight against inflation and repudiation? Two thousand business men join in request which will be sent you. Can you come here from Cincinnati?”

This is the second time that I have been honored by the citizens of Cincinnati with an invitation to speak to them on the financial questions before the people. I thank you sincerely for the confidence which that invitation implies, and I respond to it with a deep sense of responsibility. The remarks I am going to make to-night will be, in a certain sense, supplementary to those I made here three years ago. I then sketched the disastrous consequences which a policy of currency inflation would bring after it to the merchant, the manufacturer, the business man generally, as well as the farmer and the laborer for wages, and especially the latter. At that time the people of Ohio, in their State election, administered a wise and noble rebuke to the inflation movement then attempted by the Democratic party of this State. It was to be hoped that this rebuke would sufficiently check that movement, to prevent its repetition. That hope has been disappointed. Indeed, both political parties in their National Conventions of 1876 pronounced in favor of an early resumption of specie payments, and thus seemed to be agreed as to the object to be attained, and the preparations for resumption have so far proceeded that it is within immediate reach. But while we are within a hair's breadth of a final settlement of the vexed question, the inflation mania has broken out afresh, and it must be admitted that many well-meaning citizens, under the pressure of temporary distress, are honestly seeking for means of relief, and are tending toward conclusions which, in the opinion of those who think as I do, are fallacious, and fraught with great danger to the National honor as well as the public welfare.

To that class of honest and well-meaning citizens I shall respectfully address myself, and in doing so I shall, instead of making an effort at high-flown oratory, speak rather in the way of a straightforward, homely, common-sense talk.

From time immemorial, and in all countries, it has been

the habit of politicians, when the people were laboring under business depression and distress, such as has been afflicting us for the last five years, to charge those managing the affairs of the Government with the responsibility for it all. And so they do now. When you ask them to particularize their charge in our case, they will tell you that the business collapse of 1873 was brought on by a contraction of the currency; that the Government withdrew from the business of the country the means with which to carry on that business, and that therefore business broke down.

This charge has been so often and so conclusively refuted, that it well nigh exhausts one's patience to refer to it again. But you have heard of men who tell the same yarn so often that they at last believe it themselves. So it may be with those who still insist that the crash of 1873 was caused by contraction. Indeed, the inflationists need that story for their theory. They cannot do without it, and therefore valiantly stick to it. What are the facts? I have the official tables before me. There was indeed a contraction of paper currency from 1865 to 1868, but the business collapse did not occur in 1868. It came five years later, and those five years between 1868 and 1873 are generally regarded as years of uncommon prosperity. Now, what happened with the currency between 1868 and 1873? In 1868 contraction was stopped. In 1869 the amount of paper currency outstanding was $693,946,056.61, in 1870 it was $700,375,899.48, in 1871 it was $717,875,751.06, in 1872 it was $738,570,903.52, in 1873 it was $750,062,368.94. This statement includes not only the greenbacks, the national-bank notes and the fractional currency, but also the State-bank circulation, the demand notes, the one- and two-year notes of 1863 and the compound interest notes. Thus, it appears that during several years preceding the crash of 1873 the

currency was not only not contracted, but very materially increased, so that in 1873 it amounted to over fifty-six million more than in 1869.

The fact, then, stands thus: The currency was contracted between 1865 and 1868, and several years of prosperity followed. The currency was expanded from 1869 to 1873, and the collapse of business occurred. If it were true, as the inflationists insist, that the increase or decrease of the currency were at the bottom of our prosperity and depression respectively, we would have to answer that, according to the clearly ascertained facts of history, it was contraction that caused prosperity, and expansion that caused the collapse. I might even add that between 1873 and 1874 the currency was expanded from $750,062,368.94 to $781,490,916.17; that is to say, over $31,000,000, and yet the depression was not only not relieved, but grew in distressing severity. Our inflation friends may not relish that kind of reasoning; but what have you to answer? Those who know me will bear me witness that I have never hesitated to criticise those in power for things I thought wrong; but I candidly think to charge those in power with having brought on the crisis of 1873 by a contraction of the currency would be just as reasonable as to make them responsible for the equinoctial storms, or for the depredations of the locusts in the West. If the Government is to be made responsible for everything, then I solemnly demand that the abundant crops this year be put to the credit of the Administration, and the Department of Agriculture in particular.

Let us examine the causes of the collapse of 1873, and the subsequent depression, as unprejudiced business men. We all know that at the same time when the panic occurred here in the autumn of 1873, a similar crisis broke out in Europe and swept over all Austria, the German Empire and almost the whole European continent, except France,

while a severe business depression was felt in England. Surely, although this is a great country, our Congress and Administration, and the Republican party, can not have been at the bottom of all that; and yet the effects produced by the crisis in Europe were in almost every respect the same as here. Speculations collapsed, values shrank violently, real estate went down; banks, manufacturing and trading firms failed in large numbers, extensive branches of industries stopped, laboring men were thrown out of employment or compelled to work for lower wages and grievous distress spread over all those countries as well as our own, and upon candid examination you will find that as the effects were similar in the two hemispheres so were the underlying causes.

In none of those countries was it a currency contraction that brought about the disaster, just as little as in our own. There was rather an expansion of it, especially in Germany. No, the real causes were as I have more than once had occasion to describe them: great wars resulting in an immense destruction and waste of wealth; large industries ministering to the work of destruction, instead of producing additional wealth; but after that, excessive enterprise, stimulated by apparent success; the sinking of large amounts of capital in great undertakings which could yield no immediate return, such as the building of railroads where they were not needed, far anticipating the future; the invention and introduction of new labor-saving machinery, creating new facilities of production and inciting excessive manufacturing beyond present demand; wild speculation, dealing and gambling in all sorts of imaginary values; an immense number of people frantically striving to make money quickly, by any means except solid work; an infatuated faith in the certain success of windy schemes; an unnatural straining of the credit system, by pushing speculation and enterprise far beyond

the means of those engaged in it, and finally, almost everybody believing himself richer than he was, and, therefore, spending more than he could afford; hence widespread extravagance and improvident habits. And, if we inquire what the currency had to do with it, we shall find that in this country our irredeemable paper money, by its depreciation running prices up to a fictitious point, stimulated the spirit of recklessness and gambling in almost all branches of enterprise and business, incited extravagance and thus strengthened all the bad and demoralizing influences which are usually active at such a period.

Such things are apt to go on swimmingly for some time. But illusions and lies will not last always, especially in business matters. After a while it will turn out that a million of men engaged in active warfare have consumed and destroyed wealth, but not produced any; that a railroad running from Point Nowhere to Point Nowhere can not pay dividends until it has passengers and freight to carry; that the value of real estate does not depend upon the imagination of its owner, but upon the use that can be made of it; that corner lots in paper towns, where nobody lives and nobody intends to live, will not bear heavy mortgages; that articles of industry produced beyond actual demand will become a drug in the market; that shares in joint stock companies, however skilfully ballooned by operators, will at last become worthless if the enterprise yields no profits; that men who borrow more than they can pay must at last break, and that those who spend more than they can earn will finally become paupers. This light, the light of sober truth, usually breaks all of a sudden upon the people. The illusion all at once vanishes, the bubble bursts and we are set down heavily upon the hard rock of real fact.

That thing happened to us in 1873. Then we rubbed

our eyes and wondered how it all came about. And yet it was the most natural thing in the world. People who invest in air castles have no right to expect anything else than that these investments at last vanish into the air they were made of. The best thing we can do after such a collapse is quietly to gather up our five senses and go to work like men to repair our shattered fortunes. And how can these shattered fortunes be repaired? First, by recognizing the errors of our ways and discarding all self-deceptions and delusions; by remembering that our wealth must consist in what we produce and have, and not in what we dream of; by abstaining, consequently, from all windy schemes to make ourselves rich by printing the word dollar upon a piece of paper; by acting upon the principle that the only honest way to get rid of our debts is by paying them, and that we can become prosperous only by producing things that are useful, and by spending less than we earn. These may look like very old-fashioned homespun doctrines, but whatever our modern financial jugglers may try to make you believe, these doctrines are now just as good as they were a thousand years ago, and they point the only way out of our difficulties; there is no other.

To the honor of the American people be it said, a very large majority of them have been acting upon these principles for the last five years, and they are all the better for it. It is true, a good deal of wild talk has been indulged in about all sorts of methods to manufacture money out of nothing, and to distribute it so as to keep everybody's pocket full of cash, thereby putting all at ease. But, although that wild talk has befogged some, and impeded needful legislation, yet the people, on the whole, have been steadily at work producing useful things and practicing economy; and while the results of that activity have not yet been felt in all the walks of human industry, and all

classes of society, yet I venture to say that during the last five years the American people have created more real, substantial wealth than during the five years of wild scheming, gambling and speculation which preceded the crash of 1873. I venture further to say, and I think it is felt all over the country, that business activity is slowly but surely quickening again, that the American people now stand upon the threshold of a new period of prosperity and that we shall reap an abundant harvest of it, unless we throw away our opportunities by mischievous intermeddling with the natural development of things.

That revival of business and prosperity will indeed not consist in putting upon their legs again old exploded speculations, or in restoring to their wealth again business men who broke down by venturing into operations largely beyond their means, and spreading their capital all over creation. To be sure, many of that class who are still struggling may still have to go down, and no fiat money can help them. But new men will step into their places. Such periods mean the survival of the fittest. Neither must all of the laboring men who have been thrown out of work by the crisis expect that a revival of business will in all cases give them prompt employment again in the same line of work at the same wages. Many of them will have to change their occupation, and those who use their opportunities in that respect most resolutely will be all the better for it. Reviving prosperity will consist in gradually opening a fruitful field for those branches of productive industry and corresponding trade which supply actual wants. As old stocks are exhausted they must be replaced. The pressure of the times has taught us to produce many articles, formerly bought abroad, so cheaply and in such excellent quality as to introduce them successfully and largely into foreign competition. Our abundant crops find a ready market and good prices. A multitude of

circumstances concur to give to almost every branch of business a natural and healthy encouragement; and whatever changes in the methods of production may have taken place, there is no doubt that increased and varied wants will soon render possible and profitable the employment of the same, and even a larger number of men than before. Those will reap the fruit of the revival first and most abundantly who go about their business with the most diligent industry and circumspection, striving to rise slowly and surely, and keeping their expenses prudently within their earnings. Thus we may hope, as I candidly believe, to see the American people within a comparatively short period again engaged in general and fruitful activity, and in the enjoyment of largely increased wealth; not, indeed, divided and distributed as before, but so distributed as to supersede the distress of the last five years, with a high degree of general well-being. This, I think, is within our reach, provided always, we put and keep the business of the country on a sound and safe basis, and do not spoil our chances by indulging in foolish schemes.

To furnish that sound foundation, without which business can have no healthy development and the prosperity of the people will always stand upon a volcano ready to explode at any time, three things are of the first necessity: A good National and individual credit, based upon National and individual honesty; second, a sound currency, of real and stable value; and third, a safe and reliable banking system as the depository of business funds and the machinery of business exchanges.

In discussing these subjects I shall run against some popular cries, industriously used by demagogues, and repeated by unthinking men, which are fraught with mischief and disaster, as well as disgrace. I shall speak of them without reserve, for at a moment when from a period of distress we have at last a chance to emerge upon solid

ground again, and that chance seems in danger of being thrown away by acts of dishonesty or foolishness, it is time to call things by their right names.

First, as to credit: Our National credit rests upon a faithful discharge of our National obligations, and I shall show that in a great measure the individual credit and the interest of most of us rest upon the same thing. It has become the fashion of many politicians and public agitators to cry out against the bondholders, and thus to excite a prejudice against the bond, which is an embodiment of National faith. The bondholders are represented as a set of “bloated” individuals residing down East or in foreign countries, who bought their bonds at thirty-five or forty cents on the dollar and now demand one hundred cents and high interest in gold. Thus the bondholder is pictured as a sort of criminal bloodsucker, who, with cold-blooded cruelty, fattens upon the sufferings of a downtrodden people. Now, supposing our National bonds were still in the hands of those who originally bought them, can you fail to remember that when bonds were sold for forty cents on the dollar—and the quantity so sold was not large—the life of the Nation was threatened by a monstrous rebellion; that the Republic seemed to be in the agonies of death; that it appeared uncertain whether the bond bought at forty cents on Monday would be worth ten, or one cent on Saturday; and that the purchaser of the bond risked his money for the country just as much as the soldier risked his blood? Did not the American Government ask him to take that bond at almost any price when the Republic was in extremities? And now when he has helped us by taking it and giving us his money at the risk of losing it all, are we, when everything having gone well, against the predictions and expectations of many, are we as a high-minded people to turn round upon him who aided us in the hour of supreme distress, and tell

him, “You are a bloodsucker and a scoundrel”? I have known individuals who, when you had helped them with a loan, would feel and act as if they owed you not the money but a grudge. You would despise such persons as mean and contemptible fellows. Would it be more honorable for the great American people to put themselves upon the same level by saying, “Let us hate the bondholders, for they have lent us money”?

But now suppose such a cry be taken up by the American people, and acted upon by a refusal to pay that which we owe, by direct or indirect repudiation of the whole or part of the debt contracted in the hour of need, have you considered what help we may expect in case such an hour of need and danger should come upon us again?

I must confess, even if the bondholders of to-day still were the same men who, during the civil war, bought the bonds at a low price, I should consider the outcry against them as utterly dishonorable and disgusting, as well as foolish; as a National disgrace as well as a National danger—ruinous to our good name as well as to our true interests.

But who are to-day the “bloated” holders of our National bonds? It is a notorious fact that only an infinitesimal part, if any, of our National bonds are still in the hands of the original purchasers. The original purchasers have long ago realized on them, and those who hold the bonds now have almost all bought them at high figures, and in a large majority of cases probably at their par value. And who are these holders? It is estimated that at one time about one thousand millions of our bonds were held abroad. It is stated by the Secretary of the Treasury, who has the best means of ascertaining the fact, that at present the amount of bonds held in foreign countries is less than two hundred and fifty millions, probably not over two hundred. The rest of those formerly held abroad have either been paid off or come over to this country, so that we find between 85 and 90 per cent. of our bonded indebtedness held by our own citizens. And is it true that these bonds are in the hands of a set of “bloated” individuals down East? Every business man knows better than that. Nearly $150,000,000 of 4 per cent. bonds have, within two years, been sold. They are scattered all over the country, especially the West; and who owns them? Mostly small people, who consider the Government funds a better depository for their savings than the savings banks, and who thus invested in small amounts, from $50 upward. You honest farmer or laboring man, who put your little surplus into a Government security, are you aware that you have sunk down to the level of the bloated bloodsuckers, who fatten upon the sweat of the people? But more than that. A very large quantity of 4½, 5 and 6 per cent. bonds are held by banks, by insurance companies, trust companies, savings institutions and in trust for widows and orphans. Thus they form an important part of the securities upon which these institutions are based. They are among their most reliable and most available assets. Probably most of us do not own a United States bond in the world. But every one of us who holds a policy in a life insurance company, or whose house or furniture is insured against fire, or who has a deposit in a bank or savings institution, or who has a national-bank note in his pocket is as much interested in the value of our National bonds and in a certain sense as much a bond holder as the owner of a bond himself; for if the value of the bonds is attacked and impaired the security of your investment goes, to that extent, by the board. Now, my fellow-bondholders, are you aware of the disgrace of your “bloated” criminality? Do you see now who the great, dreadful, bloodsucking bondholder is? It is the American

people. You cannot revile the bondholder without reviling the American people, and you cannot attack or impair the value of the bond without not only disgracing and ruining the good name of the credit of the country the world over, but without undermining the very foundation of the most important credit institutions in the country, in which, some way or another, the interests of all of you are involved. Do that—disturb that credit system—and you may long wait for that revival of prosperity which we so much need, and which is now within our reach; for you have taken away one of its most essential conditions.

To pay a debt is not a pleasant thing, but it is a necessary and also a profitable thing. We have shown the world that we can pay ours, and that we are willing to pay it. In 1865 the total of our interest-bearing debt was $2,381,530,294.96. In 1878 it is $1,794,535,650, a reduction in thirteen years of nearly $600,000,000, or one-fourth of it. It has been said that we have paid off our debt more rapidly than was necessary and prudent. In some respects that is true. But there is no doubt that this excess of zeal in discharging our National obligations has had a powerful effect in strengthening our credit, and it is owing to the strengthening of our credit that the Government has been able to reduce our annual interest, in a far greater ratio than it reduced the debt, by funding our 6 per cent. bonds into securities bearing interest only at 5, 4½ and 4 per cent. In 1865 our annual interest charge was $150,977,697.87. In 1878 our interest charge is $94,554,473. Thus we have got rid of about two-fifths of the annual interest in the same period of thirteen years. In a still greater ratio the debt and interest have been reduced in proportion to the population. Thirteen years ago our debt was $78 25-100 per capita. To-day it is $41 57-100 per capita. Thirteen years ago the interest was $4 29-100

per capita. It is now $1 97-100 per capita. And if our credit remains intact the funding process will go on rapidly, and we shall soon be rid of further tens of millions of our annual burden. Disturb that credit by any act or attempt at weakening the confidence of the world at home and abroad in our ability to pay, or in our honest purposes, and the funding process will cease, and with it the beneficent results flowing from it.

Thus you see, in this as in other things, it is not only most honorable, but it pays best to be honest. The most expensive thing a nation can do is to attempt to get rid of its obligations without honestly discharging them. The next expensive thing is to quibble about them. The ruin from which it is most difficult to rise is the ruin of credit caused by repudiation. The next worst thing for a nation is to render itself suspected of a lurking desire to repudiate. And thus I do hope wherever you hear that most foolish and disgusting cry of the demagogue against the bondholder, you will, as men of honor and as men of business, meet it with all the scorn it deserves. The sense of honor of a nation is the source of its credit, and its credit is one of its best paying investments.

The second prerequisite of a revival of business and prosperity I stated to be a sound currency, a currency of real and stable value. Let me put to any thinking man in this assembly, be he farmer, or laborer, or tradesman, or merchant, or banker, or manufacturer, a plain, simple question, and ask for a candid answer. In what kind of money will you prefer to receive the wages of your labor or the profits of your business—in a kind of money whose value or purchasing power is stable and can be depended upon to remain virtually the same from day to day, and from week to week, or in a kind of money whose value and purchasing power are fluctuating and uncertain, so that you do not know what it will buy from one end of the

week or of the month to the other? Every sensible man who in the least understands his own interests will answer, instinctively: “Give us the first—the money of stable value; the money that will not cheat us, so that we may know what we have.” And that instinct is natural and right. It would seem especially natural at a moment when, after a long and painful period of depression, we see at last a glimmer of daylight again, and begin to hope that with industry and prudent management we shall work ourselves up once more to a reasonable degree of comfort and prosperity.

Why will you prefer the money of stable value? We hear much talk about the necessity of confidence as one of the most necessary prerequisites of a revival of business, and justly so. Now, the most essential element of that general confidence which is so necessary is confidence in the money you handle. “When I earn ten dollars,” says the workingman, “as the wages of my labor, I want to know that I can take that money to the baker, or the butcher, or the shoemaker, or the clothier, and that it will buy so much of bread, or meat, or shoes, or clothes, not only to-day, but a month hence. And when I have saved some money and put it in a savings bank to be used at some future time, I want to know that when I take it out again for use, be it a month or a year, or five years hence, it will not have materially decreased in value, but have about the same purchasing power which it now has.” That is sensible. “When I have sold a lot of goods on time, one, two or three months,” says the merchant, “I want to know that the money coming in after that time has not meanwhile depreciated, so as to deprive me of my profit, or even to involve me in a loss. I must have money of stable value, for it is the only kind I can base safe business calculations upon in buying and selling.” Sensible again. “When I make a contract,” says the builder,

“I want to be able to figure out beforehand how much money will buy the material, the lumber and the bricks and stone I shall need at a future time, and that the money I get after the performance of the contract will be worth as much as the money I contracted for.” And so on through the list.

This, I say, is your natural instinct. This is what you really need and desire, all of you, except, perhaps, the gamblers who rely upon tricks that are dark to fleece their innocent neighbors. Yes, even those of you do desire this, who, although honest men, have permitted yourselves to be affected by the fiat money disease or kindred ailments. You necessarily want a money of stable value especially in difficult times like these, when careful and safe business calculations are more than ever required. If you are sincere with yourselves you will all admit that you really think so.

Now what is that money of stable value, and how can we get it? Let me put another question to you. Many of us remember the time—it was eighteen years ago, before the war—when gold and silver were current in this country, and bank notes convertible into gold and silver. The gold and silver coin of the United States was then the only legal-tender in the payment of debts. Did you then think, or can you remember anybody who then thought, that it would be best for the people of this country to do away with gold and silver and to substitute for them an irredeemable paper money, worth so much to-day and so much to-morrow? Am I right or not in saying that a man making such a proposition in times of peace would have been unanimously voted fit for a place in a lunatic asylum? The only thing you complained of, and justly so, was the existence of wildcat bank-paper under a bad banking system, because it could not be converted into gold and silver, contrary to the promise on its face. And is it

true or not that when, under the pressure of war necessities an irredeemable paper money was issued, and gold and silver done away with, all of you thought it a great danger, fraught with misfortune? Surely you cannot fail to remember this. What was it that made you all regret so much the disappearance of coin money and the substitution of an irredeemable paper currency for it? Simply the instinctive feeling that when you had a gold dollar in your pocket you knew what you had, but when you had an irredeemable paper dollar you didn't. And that apprehension has been justified by subsequent events. You may tell me that for ten years after the first heavy emissions of the paper legal-tenders in 1863 you prospered. That is true—at least it looked so. But in 1873 the fearful day arrived when the balance sheet was struck, and where were you then? All of a sudden the balloon burst, and we came to the ground so heavily that our bones are still aching. And I repeat that this collapse was not brought about by a contraction of the paper currency. I have sufficiently shown, by proving with official figures, that for the five years preceding the crash the currency had been, not contracted, but steadily expanded until in 1876 there were over fifty-six millions more of it out than in 1869.

You will remember, also, that during that whole period of so-called prosperity it was as if an evil conscience had haunted the American people on account of that very paper money; that for years following the close of the war every political convention, every meeting of merchants, every respectable board of trade or chamber of commerce declared and resolved again and again that the country must rid itself of the curse of an irredeemable and fluctuating paper currency; that every consideration of National honor, of good policy and business interest demanded a speedy return to the specie basis. As late as

1876 both the great political parties of the country affirmed most solemnly their devotion to this great object. Even most of the very men who advocated inflation as a means of temporary relief loudly protested that the restoration of specie payments was their ultimate aim. And why all this? Whence this almost universal concurrence? Simply because every candid man admitted to himself that this country would have to rest; that there could be no confidence in our economic movements; that there could be no firm and safe foundation for National prosperity until our money system should be based again upon the rock of precious metals; that our foreign commerce would not bear its full fruit until our financial system should be in harmony again with the money of the world.

That was the instinctive feeling of the American people for years after the war. Well, then, if such was the case, why were not more vigorous and consistent measures taken for the speedy resumption of specie payments, and why did the steps that were taken meet with so strong and persistent an opposition? Simply because it is one of the weaknesses of human nature, when you desire the accomplishment of a certain end, yet to recoil from the means necessary for the accomplishment of that end, if those means threaten to be painful. A person suffering from toothache may ever so much desire to be rid of the decayed grinder, yet he will shrink from the dentist's instrument with which it is to be pulled, and involuntarily exclaim, “Wait a little.” And then you resort to chloroform or laughing gas to be unconscious of the pain when the operation is performed. If in 1865, after the war was closed, the Government had possessed some power of sorcery to transform overnight without pain to anybody our irredeemable paper currency into a money system based upon the precious metals, is there a single individual in the United States who would not have clapped

his hands for satisfaction and joy to be thus rid of the decayed tooth and to feel once more like a well man? But, unfortunately, there is no laughing gas for the correction of great economic evils. It is an easy thing under certain circumstances to introduce an irredeemable paper currency, but when it has long existed and produced its effects it is terribly difficult to get rid of. Its introduction will drive out the precious metals. Its expansion will diminish its purchasing power, and run up other values to a fictitious point. A return to the specie basis requires the acquisition of the precious metals necessary for redemption. It requires a reduction of the paper money within that volume which the business of the country will be able to float in the shape of specie, and paper convertible into specie. It requires retrenchment and economy in the conduct of business and all kinds of expenditures. Such operations cannot be effected without some painful sensations. They do not involve the destruction of any real value, but they do involve the destruction of fictions in business, of the delusive estimate in which men hold their possessions and prospects. It is another of the weaknesses of human nature that we dislike to be shaken up from a dream to sober reality, when that dream was pleasant. And thus when the practical preparations for resumption are to be taken in hand, people, although they may ever so much desire to be cured of the ailment, are apt suddenly to fear the remedy more than the disease, and thus, like the man with the decayed tooth, who shrinks from the dentist's instrument, will cry out, “Hold on! wait a little.”

Now, what is our case? The painful consequences which were feared from the practical preparations for resumption came upon us through the crisis of 1873 in the way of a natural development without there being any preparations for resumption made. Previous to 1873 no

purchase of specie had been set on foot with a view to redemption. From 1869 to 1873 the volume of the currency was expanded from $693,946,056.61 to $750,062,368.98, including demand notes and compound interest rates. And yet the collapse came. From 1873 to 1874 the currency was further expanded from $750,062,368.98 to $781,490,916.17, and yet the depression continued, which proves most conclusively the crisis was not caused by contraction, and that it would neither be prevented nor removed by expansion. But in this way speculative business collapsed, the bubble of fictitious values burst and those values gradually adjusted themselves again to the specie basis without any interference on the part of the Government in the way of preparing for resumption. Meanwhile the banks were and remained full of money, but that money found little or no employment. It became evident, not that we had not money enough for the business of the country, but that we had not business enough for the money in the country. Then a reduction of the currency set in, also by the operation of a natural development. Congress, at the instance of the very men who insisted that the business of the country demanded more currency, gave greater facilities for the emission of national-bank notes. But instead of increasing the volume of the currency as had been predicted would be eagerly done, a considerable number of banks withdrew their notes, simply because they could find no profitable employment for them. Thus a considerable reduction of the currency was effected by natural process, and the notorious fact that in spite of that reduction all the banks remained full of money, without adequate use, was a new proof that our trouble had not been for want of nourishment, but was a clear case of indigestion.

In the meantime, business men had brought their operations within prudent limits. Retrenchment and wise

economy had become the general rule; a large amount of indebtedness was liquidated, and unsound enterprises weeded out in the business world. Thus that part of the necessary preparation for resumption which is most painful in its effects had operated itself in the way of a natural process without the intervention of the Government. As is frequently the case, when physicians are at fault, nature had made an effort to right itself. At last the Secretary of the Treasury, by virtue of the resumption act of 1875, proceeded to accomplish with comparative ease what by the opponents of resumption had been predicted to be utterly impossible. He acquired for the Treasury an amount of gold sufficient for the purpose of commencing redemption, and now, in spite of all our hesitation and stumbling, the goal is reached.

Our opponents have vociferously asserted from day to day, and proved as they thought with facts and figures, that we could not get there. But, gentlemen, we are there. The Government can resume specie payment to-day, more than three months before the time fixed by the law, and if we do not proclaim resumption to-day, it is only because the law stands in the way. The word has only to be spoken, and our paper dollar, irredeemable for fifteen years, is again virtually as good as gold. The laborer's and the pensioner's dollar is as good as the bondholder's dollar. The business of the country has again the foundation of a rational and stable value currency under its feet, and, with full confidence in the money it handles, it can now enter upon a new career of enterprise and prosperity. This we have accomplished, and, as I firmly believe, we can maintain it, provided, always, we act like a sensible people and abstain from foolish and mischievous legislation.

But now what do we behold? At the very moment when this great consummation, for which the country has been

sighing for years, appears assured, a portion of the people are growing wild with preposterous schemes and propositions to undo it all and to return to chaos again; a set of physicians, when the patient is on the point of recovery and requires only repose and quiet working of natural forces, prescribing medicine to throw him into fits once more. It is the most curious spectacle a people ever presented. It would seem only laughable did it not threaten serious consequences.

What are those schemes and propositions? Let us examine them. We find, first, the proposition to replace the money system based upon the precious metals by the so-called absolute or fiat money. During the five years of depression and distress since 1873 many people groped frantically about for means of relief, not inquiring into the true causes of their difficulty or not understanding them. They thought there must be some artificial remedy to cure it within the reach of human ingenuity. That the results of the unproductive consumption, the improvident wasting of wealth, can be cured only by the production of real wealth in a slow and steady way, did not strike them as promising in their case. They wanted some quicker and more ingenious method of getting rich again. Like the alchemists of the middle ages, they thought there must be some way to make gold out of dross. The first thing that struck them as promising was an inflation of our greenback currency. But when, from 1873 to 1874 the volume of the greenbacks was expanded from $356,000,000 to $382,000,000, it had not the desired effect. The increase stayed in the Eastern banks. Then an expansion of the national-bank currency was thought of, and new facilities for the emission of bank notes given. But this did not work. In spite of the new facilities the bank currency actually reduced itself. It became evident that the business of the country would not take and circulate any

more of that money, for there was no employment for it. Then some ingenious minds hit upon a bolder plan. You have probably known persons who, when they are sick, will think no medicine can help unless it be particularly strong in color and nasty in taste. They look upon everything that is natural with distrust. Thus the scheme of so-called fiat money was brought forward, and many well meaning innocent people seem to have been talked into the belief that this at last is the true thing.

What is absolute or fiat money? It is the simplest contrivance in the world. The Government takes a little piece of paper and says to it, “Be thou a dollar,” and then the Government stamp is put upon the paper, and forthwith it is a dollar, or five, or ten, or a hundred dollars, as the case may be. Then all other kinds of money—gold, silver, greenbacks and national-bank notes—are withdrawn, and the fiat or absolute money put in their places. It will be the only legal-tender in payment of debts and Government dues. Now the present greenback bears this inscription: “The United States will pay the bearer one dollar”—or five or ten. Will not the fiat dollar bear a similar promise? Bless you, no. The fiat dollar will not promise anything, and just that is the beauty of it. According to the fiat money doctors, it was the weakness of the greenback, that it promised something. The fiat dollar does not promise anything, for it is in itself the performance of the promise—it is a dollar. The fiat money promises nothing beyond itself, for it does away with all other things. Gold and silver are antiquated stuff, entirely unsuitable for this progressive age and country. The fiat money once out, gold and silver will no more be thought of. We shall be entirely separate and independent from the rest of the world in all financial and commercial transactions. Our fiat money will not be exported, for it will not be taken anywhere else; and

so, like the poor, it stays all and always with us; and inasmuch as it costs almost nothing to make fiat money and we can make any quantity of it to suit ourselves, we shall get richer and richer, and there will be no end to our wealth and happiness. That is what the fiat money doctors promise us.

It will strike you that this is exceedingly simple and very fine; but you may have some misgivings, and say: “Well, this bit of paper may call itself a dollar, but it is, after all, only a bit of paper. Is there nothing of value behind it?” Whereupon the fiat money man gravely answers: “This is a great country. It has some forty or fifty thousand millions of dollars' worth of property in it. When the Government of this great country puts its stamp upon a piece of paper and thus makes it money, then that money is based upon the whole wealth of the country.” That sounds magnificently, and you may think, well, if this country has forty or fifty thousand millions' worth of property, and all that property is mortgaged as security for the value of this fiat money, why should not this security be good enough for a couple of thousand millions of fiat money? Now let us see how it will work. Such promises to pay as greenbacks and national-bank notes are withdrawn to make room for fiat money. It will not be necessary to make any provision for the withdrawal of gold and silver, for the precious metals, finding no further employment, will take leave of themselves, and go abroad, where they are wanted. Now the fiat money is master of the field. It goes into circulation, and for some time it will indeed circulate, for, it being the only tool of exchange left to you, you will have to take it and use it; it will circulate just as wampum-beads and clamshells and leaden bullets circulated for awhile as currency in early colonial times. It will also maintain a certain current value, as long as its volume is kept within

the quantity that would circulate in the form of specie and paper convertible into specie. But you must consider that the fiat money plan is brought forward by earnest inflationists, whose principal object is to make money plenty by issuing enough of it to keep all the boys in cash—and why should we not? it costs nothing, and we may just as well have much as little. A thousand millions, more or less, are no object, as the Government thereby burdens itself with no promise or obligation, and finally the wealth of the country, fifty thousand millions' worth of property, stands behind it, mortgaged as security. But presently, when we have made fiat money plenty, we shall find that it depreciates, and will depreciate more and more the more we issue, just as the greenbacks did, and worse. “How can it depreciate like the greenbacks?” says the fiat money doctor, with a smile of superior wisdom. “The greenback, by the absurd promise of the Government to pay coin for it, was kept in constant comparison with coin, and therefore could depreciate as to coin. But when, by the introduction of fiat money, gold and silver are utterly banished and forgotten, and our money system has become entirely separate and independent from all other money systems of the world, how can the fiat dollar depreciate as to coin?” Let us see.

In the first place, as your fiat dollars grow more and more plenty, their purchasing power will grow less, just as the purchasing power of the clamshell currency in old colonial times grew less, the supply of them growing larger, until finally they bought nothing at all. Thus the fiat dollars will depreciate as to the articles you want to buy with them. “But what of that?” asks the fiat money doctor; “that does not mean depreciation, but it means that things grow dearer in price. When it takes two fiat dollars to buy an article which cost but one dollar before, then the Government can issue double the amount of fiat

money for the accommodation of the people, for it costs nothing, and the wealth of the country will be ample security for a couple of thousand millions more.” And so it goes on and on, and in this case under the lead of the fiat money doctors, it will go on quickly until the story may be repeated of the wheelbarrowful of money carried to market and the purchase carried home in your vest pocket.

But the idea that by banishing the precious metals from our money system we can cut loose from the money system of the world, and avoid all comparison of the value of our paper money with gold, is amusingly absurd. We are a commercial nation and have large dealings with the world abroad. Our imports and exports go into the hundreds of millions. They will go into the thousands. Our exports especially are increasing beyond all anticipation. All we sell and all we buy abroad is paid and settled for on the gold basis. The prices of our principal articles of export, of our agricultural staples, are virtually determined in the foreign market. Now, while we are doing this immense business with the world abroad on the gold basis, must it not be evident to the dullest understanding that, although the last gold coin may have been banished from our domestic transactions, the value of the fiat dollar in comparison with gold will be quoted just as the greenback dollar was, and that this comparison will be a matter of daily concern and anxiety to every farmer, West and East, the price of whose products depends upon the foreign market? Thus, whatever expedient you may resort to, gold will be and remain the standard of value as to the fiat dollar. Your fiat dollar will be brought up before that tribunal to have judgment pronounced as to its worth, and the idea that by introducing here a paper-money system of your own you can withdraw from the rules that govern the commerce of the world, and change the real standard of value

in your business transactions, will appear as one of the most absurd and childish conceptions the human brain has ever been guilty of.

At last, when your fiat dollar, having been made very plenty to accommodate the people, has run down so low in its purchasing power, and cut so sorry a figure in the inevitable comparison with gold, that you begin to grow uneasy about it, you remember that it is based upon the wealth of the American people, and that some forty or fifty thousand millions' worth of property stand as mortgage security behind it. Of course, with such security, the fiat dollar ought to be worth its face in gold, and thus you may think of foreclosing that mortgage on the wealth of the country. Maybe you are a laboring man who have some money in a savings bank, which formerly was worth enough to buy a little house with, but in its fiat condition, money being plenty, appears just sufficient to pay for a jack-knife. You may go to the next best public building to see whether you can find any of the wealth of the country there, which is security for your fiat money, to lay your hands upon. I would not, however, advise you to seize upon a specific article of property as part of the wealth of the country, for you would be in danger of being arrested and put in jail for larceny. The wealth of the country, although it is security for your fiat money, cannot be handled in that way. You may think it best to present your fiat money to the Secretary of the Treasury who must be presumed to be a sound fiat man, and knows what the mortgage on the wealth of the country means. You ask him to give you good dollars for the bits of fiat paper you present, or so much of the wealth of the country as required to make that fiat paper worth something. What will be the answer? “My dear sir, you desire good dollars; these are good dollars; they are the only dollars we have. The Government has not promised you anything else.

You want a share of the wealth of this country, upon which these fiat dollars are based. Why, these fiat dollars are themselves a part of the wealth of the country. Besides, you have clothes upon your back; your wife and children have the same. If you have no house of your own, you have furniture in your rented dwelling. You have tools in your workshop. All these things are a part of the wealth of the country upon which your fiat money is based. You must levy upon what you have yourself. Of course I cannot give you what belongs to anybody else.”

Now you begin to perceive that the forty or fifty thousand millions' worth of property in the country may be magnificent security to base fiat money upon, but you cannot foreclose the mortgage upon a single blade of grass. That may seem queer to you. But it is the peculiar beauty of fiat money based upon the whole wealth of the country.

There is nothing more ridiculous than to hear these fiat money doctors pretend to have made a great original discovery, and to parade it before us as the most progressive idea of the age. Why, it is a story a thousand years old. They had such money in China in the ninth century of this era. They had it in Persia toward the close of the thirteenth century. They had it in the American colonies in the seventeenth century in the shape of bead and clamshell currency. They had it in France at the beginning of the eighteenth century, under the management of the great progressive Scotch financier, John Law. They had it in France during the great revolution in the shape of assignats. They had it in this country again during the war of independence in the shape of the Continental money; always in all essential features virtually the same: a paper money based in some indefinite way upon an indefinite something, in some cases with a promise of

redemption, in some cases without it; in some cases issued under the stress of circumstances, in some cases for financial speculation; and whenever an inflation of paper money was either a part of the scheme or forced by necessity, the final result always the same;—depreciation of the paper money, that depreciation leading to new issues, the new issues bringing forth more depreciation, and so on; everybody believing himself rich for a time, until finally the whole airy fabric broke down in general confusion, bankruptcy and ruin, when it became apparent that the grand indefinite something upon which the paper money was based, the power of the Emperor of China, or the wealth of the country, practically amounted to nothing as a mortgage security; and uniformly in the breakdown the poor people, the laboring classes suffered the greatest distress. And in every case after the great collapse, people came painfully to the old conclusion again, that, after all, the precious metals were the only safe basis of a money system; and they gathered up the few coins they could lay their hands on, and upon the ruins of their foolish hopes and windy fortunes they began a sensible business once more, in a cautious and prudent way. And now the same old scheme, exploded again and again, with a thousand years history on its back full of ruin and disaster is dished up to us as a brand new discovery, and as the great progressive idea of the century. Why, gentlemen of the fiat money persuasion, the Chinese, a thousand years ago, were just as wise and progressive as you are now, and when they had got through with their great progressive fiat money experience they were a great deal wiser. It is a matter of wonder, as well as regret, that at this day there should be so many good people giving, even for a moment, countenance to a fallacy so hoary with age and so utterly condemned by the painful and repeated experience of mankind.

I think I may take leave of fiat money and turn to our Democratic friends who are possessed with the “Ohio idea.” If I understand correctly the newest phase of the “Ohio idea,” as put forth by the Democratic convention of this State and several conventions in other parts of the country, it is as follows: The resumption act is to be repealed; all reduction of the paper currency is to cease; greenbacks are to be a legal-tender for duties on imports; all restrictions on the unlimited coinage of silver are to be removed; the national-bank notes to be withdrawn and greenbacks issued in their stead; the sale of bonds for the purchase of coin for resumption purposes to be stopped; the volume of the greenback currency is to be determined by legislation or Constitutional amendment, “so as to insure the stability of their value as well as volume.” I think I have stated it fairly.

That a man thoroughly wedded to the irredeemable paper mania should make such a platform his own, I can understand. But how a man, who thinks the resumption of specie payments at all desirable, can adopt it, is to me utterly incomprehensible. For any intelligent mind will see at a glance that its execution will render resumption absolutely impossible, and perpetuate the regime of an irredeemable paper currency for an indefinite period. In fact if there is any logic in this program, it means the permanent establishment of irredeemable paper money with all its disastrous influences.

First, they demand the prompt repeal of the resumption act. I remember some Democrats in the Senate who voted against the resumption act, not because they did not desire resumption, but because they did not think the act clear and effective enough. I myself criticised it on account of some of its imperfections, but voted for it because I was determined to support any step in that direction. I have ever since been glad that I did so vote,

for the resumption act, in spite of its imperfections, has proved far more effective than many supposed it would. In 1876 the Democratic National Convention demanded the repeal of the resumption act, not because the Convention was against resumption, but because, according to its declaration, it was earnestly for resumption; and because, as was pretended, the resumption act was an obstacle to resumption—a thing which I have never been able to understand. And now your Democratic convention and many others demand the repeal of the same resumption act, not because it is an obstacle to resumption, but because it has brought it on. And indeed, unless they hurry up that repeal quickly, it will appear like the repeal of last year's almanac. Now, what is the meaning of this demand for the repeal of the resumption act? Here stands the Government, and says, “For sixteen years we have promised to redeem these Treasury notes on demand, dollar for dollar—a dollar in coin for a dollar in paper. For sixteen years that promise has stood dishonored. Now I am able and ready to fulfil it. I am able and ready to make and keep the pensioner's and the laborer's dollar, the merchant's and the manufacturer's dollar, as good as the bondholder's dollar. I am able and willing to give to the business of the country the safe foundation of a sound currency, uniform and stable in value in harmony with the money of the world. All I want is to be permitted to execute the law.” Whereupon you, my Democratic friends, answer: “Whether you be ever so able and ready to do all this, we say you shall not do it”; and then you proceed with a number of propositions, each and all of which are designed to take and keep from the Government its ability to perform its long dishonored promise, and to do the beneficent things it stands now ready to do. The Government says, “I have now some $346,000,000 in greenbacks to take care of. With the coin I have, I feel

strong enough to commence and maintain the redemption of all of that quantity that are likely to be presented for redemption. There are now $324,500,000 of national-bank notes in circulation, which are redeemable in green backs. This system aids me powerfully in commencing and maintaining redemption, inasmuch as it relieves me of direct responsibility for about one-half of our paper currency, while all of it will maintain the same current value. Were I directly responsible for the whole mass of paper money, $670,000,000, my coin resources would not be sufficient to resume specie payments.” Whereupon you, my Democratic friends, answer: “We demand that the national-bank currency be withdrawn and greenbacks, for which the Government is directly responsible, put in its place. This we demand, whether it renders you unable to resume specie payments or not.” The Government says, further: “The resumption of specie payments renders necessary a considerable reserve of coin in the Treasury. I used to receive gold through the duties on imports which, however, was mostly needed for the payment of interest on National bonds. If specie payments are assured, that source of coin revenue may be dispensed with; but, to enable me to accumulate a reserve of coin, it was necessary that I be permitted to purchase coin with bonds, and I was permitted to do so by law. If, by the substitution of greenbacks for national-bank currency, the amount of paper money for which I am responsible be doubled, it will be all the more necessary to maintain the payment of duties in coin, and to go on with the sale of bonds for coin, if we are ever to prepare for resumption.” Whereupon, you, my Democratic friends, promptly answer: “We demand that duties on imports shall be paid in greenbacks, and that the sale of bonds for the accumulation of a coin reserve shall cease.”

Now, need I tell any intelligent being what the consequences will be if these Democratic demands be enacted into laws? Not only to prevent the resumption of specie payments now, but to render the resumption of specie payments utterly impossible forever, at least as long as such laws exist.

It is simply doubling the amount of paper money which the Government will have to redeem and at the same time stripping the Government of every means to provide for that redemption. The source from which the Government derived its coin for the payment of interest on the public debt being stopped, the coin reserve now in the Treasury will have to be drawn upon for such interest, and that reserve will soon vanish into nothing. How the Government is then to get coin even for the payment of the interest on the public debt, our Democratic friends fail to tell us. Finding no employment as currency here, gold will promptly go abroad where it is in demand for such employment, and we shall be further away from specie payments than ever before.

I repeat, therefore: that a thoroughbred inflationist should advocate this program is intelligible; it serves his purpose. But when a man, who ever again desires to see specie payments restored in this country, adopts such a platform, what shall we think of his understanding or his conscience? The defeat of resumption will not be the only result. No sooner is such a policy inaugurated than the premium on gold will again reappear, the value of the greenback now within a hair's breadth of gold will sink and gold will again be a subject of speculation and gambling.

This is inevitable, for everything will be thrown back into fluctuation and uncertainty. The step back from specie payments will put even the good faith of the Nation in question. Confidence will be more shaken than ever. A black cloud of new doubt will hang over every business

interest; for when a policy so insane, as to run away from specie payments, can be adopted, every imaginable nonsense will thenceforth appear possible. Then good-by reviving prosperity—we shall be at sea again, the Lord only knows how long.

It helps our Democratic friends very little to put forth the fantastic promise, “that the amount of paper issues shall be so regulated by legislation, or by organic law, as to give the people assurance of stability in the volume of the currency, as well as the consequent stability of the value.” The idea to establish by Constitutional amendment, to be assented to by three-fourths of the States, that is, by twenty-eight State legislatures, how much money the country is to have—and when the amount so fixed is found too large or too small, that it should not be possible to change it until the assent of twenty-eight State legislatures shall be again obtained for the change, that idea is so childishly preposterous that we must wonder how serious men could ever have entertained it.

The other proposition that Congress, by legislation, is to be the permanent authority to regulate the volume of the currency, and consequently the value, is scarcely less astonishing, coming as it does from Democrats who pretend to be so faithful to their time-honored principles. Have you considered, my Democratic friends, what an awful power you thus propose to perpetuate in the Congress of the United States? You yourselves admit that the value of your irredeemable paper currency will depend upon its volume. Congress is to fix that volume, and by increasing or diminishing it, Congress is therefore to determine what every dollar in the land shall be worth. The value of every piece of property, of every article of merchandise, of every private fortune, of every chance the contractor has in his contract, of every dollar the laboring man has in the savings bank or the merchant on

deposit, will be at the mercy of the Congress of the United States. No man can make an investment, no merchant can sell or buy a lot of goods on time, no manufacturer can accept an order, no contractor can make a contract for a railroad or building, without Congress having it in its power to determine their profit or their loss, by regulating the volume, and consequently the value, of the currency, up or down. Can Congress, can any body of legislators, be depended upon to exercise so tremendous a power with wisdom? Why, gentlemen, no assembly of human beings, even if you get together the shrewdest financiers in the world has ever been found wise enough to determine how much money the business of a great country needs in its multifarious fluctuations. But if so awful a power should fall into the hands of such financiers as made this Ohio platform—then let us devoutly pray that the Lord preserve us.

But it is not the only question whether such a power is likely to be wisely exercised or not. The question is whether any Government should be intrusted with so tremendous, so far-reaching, so tyrannical an authority at all. Oh! my Democratic friends, who pretend to be so jealous of the power of the General Government, how are you fallen from the high estate of your ancient principles, that you should now be willing to give to that General Government the power to dispose of every citizen's private fortune. Oh! shades of Jefferson and Jackson, where are you?

I repeat, it is not only a question of Congressional wisdom. The very fact that Congress is to dispose of so tremendous an interest by mere legislative act cannot fail to have a most disquieting and enervating influence upon the business of the country. Are we not all witnesses to the fact that for years, during every session of Congress, the whole business community stood on tiptoe, with fear

and trepidation, lest some tinkering genius in Congress should get up and push through some measure interfering with all their business calculations and arrangements? Have you not all heard the heartfelt prayer of business men at the beginning of every session, that Congress might do its necessary work quickly, and then adjourn? Have you not time and again heard the general sigh of relief when Congress at last did really wind up and go home? And now imagine a Congress with a majority composed of such financial geniuses as advocate the “Ohio idea,” every one of whom has his unfailing financial nostrum in his pocket, and that Congress intrusted with the power to determine the value of every man's property, and the chances for profit or loss of every man's enterprise! Will the business community ever get out of a state of feverish uncertainty and apprehension? Are fits to be the normal condition of our economic system? Are we not at last to have that repose which is so necessary for safe business calculations, for a quiet rebuilding of our fortunes and a new period of prosperity? If so, then in the name of common-sense let us get rid of a system of irredeemable paper currency, which puts into the hands of Congress the power to determine how much money we shall have and what that money is to be worth. Let us at least reduce the Government again to its proper functions, and return to that condition of things in which the currency regulates itself.

No Congress knows how much money the business of the country needs, but business itself feels and determines it with certainty. When specie payments prevail, and there is more coin in circulation than business needs, it will flow out and go where it finds more profitable employment. When there is less coin in circulation than business requires, it will become dear, and flow in from countries where it has less profitable employment. The same rule

applies to a well-regulated system of bank issues based upon specie. When the quantity of notes out is in excess of the requirements of business, they will flow back to the banks for redemption. When the quantity of bank notes is insufficient for the wants of trade, the banks will find it profitable to increase their issues, and thus the gap will be filled. Local and temporary disturbances, occasional panics or speculative periods, which under no money system can be entirely prevented, may sometimes interfere with this self-adjusting machinery, but on the whole the rule holds good. The Government has nothing to do with it but to see that the coin struck in its mints be of the prescribed standard value; it prevents and punishes counterfeiting; it regulates the banking system, so as to make it safe, and then it lets currency and trade in their relations take care of themselves, without assuming any arbitrary control over volume and value. These are the simple principles of a sound money system under which business can regain confidence in itself and prosperity will revive. That is the end which we should accomplish and which is now within our reach.

The paper-money men have contrived to befog the public mind with certain superstitious impressions to the prejudice of the cause I advocate. Let us look some of them in the face. One is a sort of dark terror with which the word contraction has been invested. It would almost seem as if contraction were some diabolical power, bringing forth all the ills human flesh is heir to. Thus, we are told that contraction, with all its concomitant evils, was one of the infernal effects of the resumption act. It is true that under the resumption act, since 1875, the currency has been contracted. But it is also true that this contraction has not had the least depressing effect upon the business of the country, and I can easily prove it. If contraction had cramped business, that is to say, if

business had wanted more currency than was out, it could easily have had it. Banking was made free by that very resumption act. Any five persons procuring the necessary capital can start a bank under the National system and issue bank notes. Had business required more currency than was out, the issuing of more bank notes would have become profitable. There is plenty of money lying idle and waiting for a chance. The chance would certainly have been taken hold of by enterprising persons had business really needed more currency. But not only has the volume of bank notes not been increased, but it has been voluntarily reduced by the banks. This is conclusive proof not only that business does not want any more currency than is out, but that it has even more than it can profitably employ. The contraction that has taken place was, therefore, not the result of a forced operation, but of a natural process.

The reduction of the volume of greenbacks has been stopped by law; but business is more sensible than Congress and rids itself of the currency it does not need, and nobody is hurt. It appears, therefore, that this terrible bugbear is entirely harmless.

Another foolish notion which has been industriously instilled into the public mind is that greenbacks are a part of the wealth of the country; that by a regulation of the volume of the greenbacks the wealth of the country is correspondingly diminished, and that a reduction of the greenback circulation must, even under the specie payment system, necessarily result in a contraction of the currency. In fact, the greenback has been made by the inflationists the subject of an idolatry which, upon close examination, appears exceedingly ludicrous. There is a sort of awful sanctity and mysterious power ascribed to it, which no other kind of money ever possessed. We hear of the bloodstained greenback, the battle-hallowed

greenback, the greenback conqueror of the rebellion, the greenback savior of the Republic, and people talk as if to withdraw a greenback from circulation after its glorious achievements would be an act of the basest National ingratitude. Well, now, assume the greenback had, in the absence of gold and silver, done good service during the war, is there anything to grow sentimental about? Did not our old muzzleloading guns do the same, while breechloaders were scarce? Did not hardtack feed our soldiers when soft bread could not be had? Did not mules have to pull our wagons when the supply of good draft horses fell short? Why do we not go in ecstasies over these things and exclaim: “Oh, bloodstained, grand old muzzleloaders that fought our battles! Oh, battle-hallowed hardtack that fed our soldiers! and thou, oh most noble mule that pulled our trains! how can you, the conquerors of the rebellion, the saviors of the Republic, ever be forgotten? How can an impious generation substitute for you something that suits better?” All this sentimentality would not prevent us from substituting breechloaders for muzzleloaders in the Army, from eating soft bread instead of hardtack and from preferring good horses to the noble mule. Is there any sound reason why we should not use something better in preference to the greenback if we can have it?

What is the bloodstained, sanctified, greenback dollar after all? It is nothing more nor less than a promise on the part of the United States to pay bearer one dollar, made a legal-tender for the purpose of currency; and I regret to say that at one time the glorious greenback was worth only thirty-eight cents on the dollar, and that since it has slowly and painfully crawled up in value, after inflicting immense loss on individuals and the country at large, until now at last it has reached par. And as to the service rendered by the greenback in the war, a retrospective view of the case inclines me strongly to the opinion that had Congress been courageous and strong enough to insist upon raising money by taxation instead of resorting to the expedient of an irredeemable paper money, which universally inflated all prices, the war would have cost us from one thousand to fifteen hundred millions less, and we would all be the better for it, had we never seen the glorious greenback. For this I have excellent authority. In a message approving an act to issue $100,000,000 in greenbacks, January 17, 1863, that genius of common-sense, Abraham Lincoln, spoke these memorable words, foreshadowing it all: “While giving this approval, however, I think it my duty to express my sincere regret that it has been found necessary to authorize so large an additional issue of United States notes, when this circulation and that of the suspended banks together have already become so redundant as to increase prices beyond real value, thereby augmenting the cost of living to the injury of labor, and the cost of supplies to the injury of the whole country.” There is, then, absolutely no reason for worshipping the greenback with that idolatrous adulation. We had better take a sober, common-sense view of it.

Now, suppose after the resumption of specie payment you present a greenback dollar to the Treasury, and you get a gold dollar for it, and the greenback is then canceled and destroyed, will the volume of currency be thereby contracted? Not at all. The greenback dollar has disappeared, but the gold dollar has gone in its place for circulation, and the volume of the currency remains just the same. Is there any horror about that? Will anybody lose anything by it? It is simply the substitution in the circulating medium of a gold dollar for a promise to pay. That is all. Now, suppose this operation be repeated many million times, and the greenbacks so redeemed by

the Treasury be not canceled and destroyed, but be paid out again and returned to circulation, according to the present law, what will happen then? Then the volume of the circulating medium will have been increased by the amount of coin issued by the process described. Now, if that increased volume of currency is just sufficient to satisfy the demands of business, and no more than sufficient, the two kinds of currency out, the metallic and the paper, will continue to circulate side by side. But if that increased volume turns out to be in excess of the real requirements of business, what will then happen? Then so much of that volume as is not wanted by business will withdraw from circulation, and it will be the metallic part, for that can be used in our foreign commerce, where our paper money cannot be used, and it will be exported. The paper money, according to the universal law, that an inferior currency always crowds out the superior one, will circulate alone. Suppose, then, it appears that the paper circulation alone is in excess of the real requirements of the business of the country, what then? Then something like the amount of that excess will go to the Treasury for redemption, and the coin paid out in that redemption being over and above the volume of the circulation required by the business of the country, will again either be hoarded or go into our foreign commerce and flow out. If, then, the greenbacks so redeemed are paid out and put in circulation again by the Government, so that the whole volume of paper money out remains in excess of the requirements of business, that process will repeat itself again and again, and thus the coin reserves of the Treasury will be gradually and surely drained, without being added to the circulation of the country.

Now, our greenback high-priests will exclaim: “Does not this show that the precious metals are a very unreliable currency?”

Not at all, gentlemen. It shows only that, in order to secure to the people the benefit of the circulation of a good value currency, it is necessary that the volume of the paper money out be not permitted to be in excess of the real requirements of the business of the country, but should be kept within those requirements. Then the precious metals will stay in active circulation and their supply will regulate itself according to the wants of trade. But you ask: “Will not that again cause a grinding and oppressive contraction?” I answer, not in the least; and why not? You all will agree that we do not want more currency than the requirements of business demand. For every greenback dollar withdrawn and held back by the Treasury a coin dollar will unfailingly appear in circulation, if that dollar is demanded for circulation by the requirements of business. It will either come out of the Treasury, and stay in circulation, or, in obedience to the same law which makes water flow down hill, it will come from some part of the world where it has less profitable employment, or its place will be supplied by bank emissions always ready to fill a gap. You see how little reason there is under the specie payment system to fear contraction as a cause of financial disturbance and depression. And it is very much to be regretted that the vague apprehensions produced by a diligent parading of that same bugbear has misled so many well-meaning men into the support of inconsistent and dangerous measures of legislation. The less the Government has to do with the volume of the paper currency, the better that volume will regulate itself, and the less shall we hear, and the less will the people be afraid of contraction as the source of all human ills.

Still another vague impression has been produced upon the popular mind, that the old silver dollar of the fathers is a sure medicine for all economic ailments, and our

Democratic friends are loudly demanding “the removal of all restrictions to the coinage of silver and the reëstablishment of silver as a money metal—the same as gold, the same as it was before its demonetization.” Upon this point I shall permit myself only a very few remarks. Every sensible man will be in favor of silver coin as a part of our monetary system. Silver coin is the money for the small transactions of the retail trade. It is, therefore, perfectly correct and judicious to make it a legal-tender to a limited amount. But it is not the money for the great transactions of modern commerce. It is not the metal to serve as a standard measure of value in those transactions. For this there are two good reasons: One is the weight and bulkiness of the metal in proportion to its value; and the other is the fact that in our times its value is subject to violent fluctuations. To transport a million of dollars in silver, four railroad freight-cars would be required. And the fluctuations in the value of silver have of late amounted to more than 16 per cent. in one year, about as much as the fluctuations of our irredeemable paper currency in some of its worst times. The transportation of silver money in the settlement of balances in a country like this, whose internal business transactions go into the thousands of millions, will, therefore, be immensely inconvenient and costly, and the use of silver as a standard measure of values will be like the use of a yardstick as a standard measure of length, which is two feet nine inches to-day and two feet six inches to-morrow, but has not been and is not likely to be three feet, as it ought to be, at any time. To use it as a standard of values together with gold is like the establishment of two yardsticks, one of which is longer than the other, for measuring the length of the same articles. To decree by law that the proportion of value between silver and gold shall be and remain as sixteen to one, or fifteen and a half

to one or whatever figures you may adopt, while the bullion value of silver in the commerce of the world is constantly fluctuating, would be like making a law that the water in your river shall never rise above, and never fall below a certain water mark. It is evident, therefore, that while silver coin will be largely and conveniently used in the small transactions of retail trade as a sort of token money, it will not long be able to maintain itself anywhere in the civilized world as a standard of value, and as an unlimited legal-tender in the great transactions of business. There are still some European countries in which silver money is a full legal-tender; but they have prudently limited the coinage of silver, and as was shown in the recent international conference at Paris, held at the request of our Government, they carefully abstain from entering into any international understanding concerning that subject, which would in any way bind them to the maintenance of silver as a fixed standard of value.

Congress at its last session restored the full legal-tender character of the silver dollar, and ordered the coinage of not less than two and not more than four millions of silver dollars per month. How will this work? Great predictions have been made of relief and prosperity to follow immediately upon the passage of this act, and on the other hand of evil consequences. So far no great effect either way has been visible. The mints have steadily coined their millions per month, but although the people of the United States were represented as fairly burning with love for the dollar of the fathers, nobody seems now anxious to hear its jingle in his pocket. The bullion value of the silver dollar is at present about eighty-seven cents in gold, with a downward tendency. Now, it is possible that silver dollars will be at par as long as the quantity issued remains within that volume which can be used in small retail transactions. How large that quantity is

only experience can determine. But it seems inevitable that, as soon as that quantity is exceeded by the silver dollars put into circulation, silver dollars will be quoted at a discount as to gold, or, in other words, gold will bear a premium as to silver, and we shall have the old uncertainty, and the gambling speculations of the gold-room in Wall street once more. And what will follow? As more and more silver money is put into circulation, the old universal law, that the inferior currency drives out the superior one, will operate again; gold will leave the country and silver coin will remain our only metallic currency. We shall then have reached the condition in which the Chinese have been for a considerable time. And our Democratic friends in Ohio seem [to be in] a particular hurry to reach that condition, for they loudly demand that the coinage of silver, which is now limited to $4,000,000 per month, shall be relieved of all restrictions. But I can not permit myself to doubt that, when with the actual resumption of specie payments, a better order of things and a revival of prosperity dawns upon us, the American people will be disposed to approach this question also with a more dispassionate and clearer judgment.

The third thing which I pointed out as necessary to lay the foundation for sound business and prosperity is a well-regulated and safe banking system, as a depository of business funds and a machinery for business exchanges. How supremely important a part of our economic organism banks have become I need not explain. Every practical business man, as well as every student of the subject, knows it. The American people, even of this generation, have in this respect, gone through a lively variety of experience, from the wildcat State banks, which existed before the war, to the National banking system of to-day.

What qualities must a bank possess so that you may

call it a good one? If it be a bank of issue, its notes must be well secured and surrounded with such guarantees of convertibility that they may pass throughout the land without discount and without danger of loss to anybody. Second: Its deposits must be well secured by reserves, so as to be reasonably safe. Third: Its discount and loan business must be conducted without extortion, so as to afford reasonable accommodation to the business community. When the banks of the country possess these qualities, they are a blessing to the business community worth untold millions year after year. When the banks do not possess these qualities they are the source of infinite distrust and restlessness; for then business walks as if on a thin crust of ice, in danger of breaking through every moment. You all know this. Now compare the State-bank system as it existed before the war with our national-bank system as it exists now, and what do you find? Under the State-bank system we have had partial and general suspensions and breakdowns of banks in 1809, 1814, 1825, 1834, 1837, 1839, 1841 and 1857, resulting in aggregate losses of hundreds of millions to billholders and depositors, and the most disastrous confusion in the business of the country. Our National banking system has now been in existence about fifteen years. It has passed through a financial crisis more distressing perhaps than any that ever swept over this land; and what has been the result? Not a single holder of a national-bank note has lost a single cent, and the whole loss suffered by depositors in national banks during the whole period of their existence, including these five terrible years of collapse and distress, amounted to about $6,000,000, a loss less than that suffered by depositors in State and savings banks this year alone. These are facts which cannot be disputed. The national banks, have, therefore, successfully stood a trial which no banking system in this

country ever stood before. And now we are told that the National banking system is unpopular, and must be abolished. I do not hesitate to say, gentlemen, it is not true that the national banks are unpopular. Whence comes the cry about their unpopularity? I will tell you. Some political agitators, to make capital for themselves and against their opponents, denounce the national banks as a monopoly oppressive to the people, and then a multitude of other politicians, as usual, bend before the breeze. That is all.

What is the test of the popularity of a bank or a banking system? It is the confidence of the business community. Apply this test. Is there an individual in this broad land who, from the foundation of the National banking system to this day, ever hesitated a single moment to take a national-bank note at its face value, no matter in what corner of the country the note was issued? You know there is not. Is it not true that business men deposit their money, as a general thing, in national banks with a greater sense of security than they ever felt with regard to any other banking system? You know that is so. It is an indisputable fact, therefore, that the National banking system enjoys the confidence of the business community in a higher degree than any other ever did. I assert then, that general confidence being that only true test, the National banking system is not only not unpopular, but it is the most popular we ever had, because it is the safest and best we ever had. And why is it the safest and best? Because under the National banking act, the details of which I have no time to go into, the notes issued by national banks are so well secured by deposits of United States bonds, that a loss on the part of a holder of a national-bank note is simply impossible; and because under the same National banking act reserves so ample are required, and a system of Government supervision is

enforced so strict and searching that the speculating away of the bank capital, or dishonest tricks in bookkeeping or in making dividends, or defrauding depositors of their funds by bank presidents and directors, is next to impossible. Hence it is that during fifteen years of their existence, including five years of a terrible crisis—and I repeat this fact, for it is important enough to bear repeating—not a cent has been lost by a single holder of a national-bank note, and the loss of depositors in national banks has been less than the loss of depositors in the State and savings-banks alone was in a single year.

And now our Democratic agitators demand that this banking system be abolished. Indeed, if we are to abolish the safest banking system we ever had at a moment when confidence, and therefore a safe banking system, is more than ever needed, the reasons must be very weighty. What are they?

First, it is said that the national banks enjoy privileges which are oppressive to the people; that for every $100 in bonds they deposit in the Treasury they are permitted to issue $90 in notes; that they draw interest upon the bonds, and then lend out their notes and draw interest on them also, which makes double interest; that thus they fatten and grow rich at the expense of the people, and that, therefore, it would be more economical for the people if the bank notes were withdrawn, greenbacks issued in their stead and the bonds on which the bank notes have been issued, be bought up in the market with the greenbacks so issued, so as to save the interest on the bonds. I think I state the case fairly.

From this it would appear that the banks must get immensely rich; and inasmuch as national banking is now free it is a wonder that not more of you go into so profitable a business, and a greater wonder still that about thirty millions of national-bank circulation has within a few

years been withdrawn by the banks themselves. As people are not apt to lose a good chance to make money, there must be some trouble about those immense profits, which our Democratic friends fail to state. It is always wholesome to look at official figures. I have here a statement made by the Comptroller of the Currency before a Congressional committee in February last. It is some what dry reading, but we must exercise patience to get at the truth.

On February 15th the par value of the United States bonds deposited in the Treasury as security for national bank notes was $346,243,550; gold being then at 2¼ per cent. premium, their currency value was $363,372,854.

The amount of circulation issuable thereon was $311,619,195; the gold interest on the bonds, $17,290,071; the currency value of that interest at the time, $18,147,279. “But,” says the Comptroller, “as the banks are required to pay annually into the Treasury a tax of 1 per cent. on their circulation, or $3,116,192, there is left $15,031,087 in currency as the net amount of interest received by them on the bonds.” “Upon receiving circulation,” says the Comptroller, further, “the banks are required, by the act of June 20, 1874, to place an amount equal to 5 per cent. thereof, or $15,580,960, with the Treasurer of the United States as a redemption fund, leaving out of the $311,619,195 of circulation issuable upon their bonds, $296,038,235 available for use, which amount, if loaned at 8 per cent., will produce an income of $23,683,059, and this income added to the net interest on their bonds gives $38,714,146 as the whole income from bonds and circulation.” “But,” he says further, “if the capital itself, which was necessary to purchase the bonds ($363,372,854) were loaned out by them at 8 per cent., the annual income therefrom would be $29,069,828, and the difference between this sum and the whole income from their bonds and circulation, which is

$9,644,317, or 2 65-100 per cent. on the capital invested, represents the profits that the banks would receive over and above what could be obtained from the loan of the same amount of capital at the rate of interest named, provided that the whole amount of circulation received by the banks upon their bonds, less the redemption fund, could be kept loaned out by them continually throughout the year.

“In the above calculation no deduction is made for the costs of the redemption of the bank circulation, which lessens by so much the profits on circulation. Those costs were for the fiscal year ending June 30, 1877, $357,066. Another point that should be considered in the above estimate of their circulation is that the banks held their bonds at a premium, which appeared among their assets for a large amount. It was on December 28, 1877, the date of the last report of their condition, $8,834,639.”

The Comptroller states further that if the bonds of the banks necessary to secure their circulation were converted into 4 per cent. bonds, which will as much as possible be done, their profits on circulation will be 1 91-100 per cent. on the capital employed.

Thus it appears that the national banks are by no means the gold mines they were represented to be, especially considering that of late they have not been able to keep their whole circulation loaned out the year through, and that the losses charged off by all the national banks during the year ending September 1, 1876, were $19,719,026.42; during the following year, 1877, $19,933,587.99, and during the six months ending March 1, 1878, no less than $10,903,145.14, a total in two and a half years of $50,555,759.55. Now, it will appear natural to you that the ratio of earnings of the national banks to capital and surplus for the year 1877 was only 5 62-100 per cent., and this year it will not be greater. I am sure many of your

business men of Cincinnati make a great deal more money on their capital than these bloodsucking institutions, and thus it is explained why you do not rush into national banking.

Now for the earnings of 5 62-100 per cent. on their capital and surplus which the national banks make, what do they give us? They give us the safest banking system we ever had. Suppose the profits on their circulation were 5 per cent. instead of 2½, and their average earnings, as to capital and surplus, 12 per cent. instead of 5½, would it not still be folly to forget that this banking system, by its safety, is worth many times the interest on their bonds every year to the business interests of the country? Can you expect to have a banking system like this without any profit at all to the men investing their money in it? You speak of saving to the people the interest on the bonds deposited by the national banks by the destruction of this system, and you call it economy; you call it economy to wipe out this safe system and substitute for it, as would inevitably be the case, the old State banks again, with their wildcat and yellow-dog currency, which robbed the people by the wholesale. You might just as well call it economy to abolish your paid fire department, and intrust your property again to the boys who run with the machine, because the paid fire department costs something. Are the business men of the country unreasoning children that they should act thus?

But you may say, why not deprive the national banks of this currency, thus saving the interest on their bonds, and then still keep them under the strict Government supervision which makes them so safe? I will tell you why not: Because the benefit arising from circulation was the principal thing which induced those corporations to come into, or organize under the National system, and to submit to the rigorous Government supervision, which is by

no means pleasant to them. Deprive them of that benefit and most, if not all, of the 2400 national banks now in existence will withdraw from the National system and become State banks again. You cannot eat your cake and keep it too. But there are still other reasons why the withdrawal of the national-bank currency and the substitution therefor of greenbacks appear to me highly detrimental to the public interest. I will not go into a discussion of the question whether new issues of greenbacks, a Government paper-money, in times of peace, would be Constitutional or not. I am strongly of the opinion that they would not be Constitutional. But, leaving that aside, even if the Constitution did not stand in the way, the following points are of decisive importance:

First. The substitution of greenbacks for national-bank notes, as I have already shown, would make the resumption of specie payments impossible, not only at present, but for an indefinite time. It would launch us out again upon the sea of irredeemable paper-money, without rudder and compass.

Second. Our national-bank currency possesses a quality very important to the business of the country, which the Government paper-currency does not possess. It is the quality of elasticity. Have you not all been demanding a currency elastic in volume? Well, the bank currency is. The Government paper is not. The volume of bank currency, under a well-regulated system, is determined by the requirements of the business of the country. When more is needed it will become profitable to issue more, and it will be issued. When less is needed, the excess flows back to the banks and withdraws. It is a self-adjusting process. The volume of Government paper-currency is fixed by law, and that law is made by politicians. Whatever the changing needs of business may be, that volume of the Government paper-currency remains

fixed, until through the slow and cumbersome machinery of legislation, the law is changed again by politicians. And of all human agencies to determine the volume of currency needed by business, business itself is the most reliable and best, and a set of politicians is the unsafest and worst. The Government is a bad banker, but if well administered it may be a good bank comptroller, as it proved in this instance. In a very important respect, then, national-bank currency, being equally safe as to the value, is vastly superior to greenbacks, and every thinking business man knows that it is so.

What other objections are there to the national banks? That, as Democrats say, the national-bank currency being based upon United States bonds, the maintenance of that circulation will tend to perpetuate the National debt. Well, the debt outstanding is about eighteen hundred millions. I would respectfully ask our Democratic friends whether they are in such a hurry to put their hands in their pockets to pay off those eighteen hundred millions this year or next? Will it not, even under favorable circumstances, take at least twenty-five or thirty years to accomplish that task? But while we have the National debt will it not be well to put it to the best use we can? When at last, after twenty-five or thirty years, we have paid it off until we come down to the last four hundred millions, will it not then be time enough to discuss whether it may be best to pay off that little amount too, or to keep it as a basis for bank circulation? Suppose we adjourn this debate until that period. Let me suggest that it is useless to borrow trouble about eggs to be laid a quarter of a century hence. Indeed, this objection shows the extreme poverty of argument to which the opponents of the national-bank question are reduced.

Their last point is that the national banks are a monopoly and the embodiment of the money-power. Now, I

am as firmly opposed to oppressive monopolies as anybody. But I am equally opposed to, and I feel a hearty contempt for, that trick of demagoguery which brings the charge of monopoly or oppressive money-power against everything against which it is thought expedient to excite the prejudices and hatred of unsophisticated people of small means. If that sort of demagoguery be extensively and effectively indulged in, we may, as a nation, have to pay dearly for it.

Can the national banks be called a monopoly? Monopolies are exclusive, and national banking is free to any person in the land who has money to invest. There is, then, a monopoly of which everybody can become a party and beneficiary. There are at present 208,000 shareholders in the national banks in the United States. More than one-half of them hold shares to the amount of $1000 and less. They are presumably people of limited means, who have thus invested their little surplus. And any five of you, if you can raise the necessary capital, may, under the laws, organize a national bank. And this system is called a monopoly. Why, the charge is too absurd for argument. And where is the oppressive money-power in these banks? What has it been able to effect? Those banks are the most rigidly restricted, the most closely watched, the most keenly supervised and controlled institutions in the country. Has this money-power ever been strong enough in Congress to remove a single one of their restraints; to secure to them the least additional privilege or latitude of action, or to relieve them of a single one of their burdens? You all know that it has not. What a money-power is this, that can effect nothing for its own advantage!

And what are the relations of Government to those banks which our Democratic friends pretend to be so afraid of? The Government issues to the banks their

currency, and then it sees to it that every dollar of that currency be safe; that the stock be paid in, that the reserves be maintained according to law, that the books be regularly and honestly kept, and so on. In one word the Government sees to it that no tricks be played by which the billholder or the depositor might be defrauded. And, when the Government has to make a loan, the banks sometimes aid it in peddling it out. That is all, and there is your monopoly, and your grinding money-power.

And now, my fellow-citizens, I ask you in all candor and soberness, would it not be an act of wicked folly, for reasons so flimsy, without the least prospect of any real advantage, wantonly to destroy a banking system which, as every man in the country knows, is not only the best we ever had, but better than any other we are likely to have; to destroy it at a moment when with it the resumption of specie payments is easy, and without it impossible, so that it would have to be invented if it were not there; destroy it while the industrial energies of the Nation, after a long, painful period of paralysis and distress, are at last slowly and timidly venturing forth again, and when, above all things, confidence is needed to quicken the circulation of the blood in the social and economic body—and then just at such a moment to destroy the only great institution that has successfully passed the crucial test of a terrible crisis, and, therefore, justly does command universal confidence; and that institution the banking system, the most indispensable financial agency in all business transactions—aye, to start in a revival of business with the general breaking up of a good, reliable banking system; to inspire confidence with an earthquake! Why, gentlemen, the idea is so utterly childish and preposterous, that every sane man who ever thought of it must blush with shame at his own folly, when he calmly inquires into the full meaning and consequences of the proposition.

Certainly no man of common-sense need be told that under such circumstances it is the only wise policy to keep the good things we have, and to let well enough alone.

And now, my friends, I am come to a close. The American people are at present engaged in a political struggle to determine the character of the next National Legislature. The financial question has, for the time being, well-nigh swallowed up all other issues dividing parties. I sincerely regret to find the Democrats of Ohio as firmly wedded to the fallacies we combated in 1875 as they were then, and their party in other States drifting into the same dangerous current. I sincerely regret this, I say, for I am not partisan enough to rejoice at the errors of the opposition, if they threaten to become destructive to the public welfare. I desire both parties to be as good and patriotic as possible, so that the bad tendencies of one may not encourage the faults of the other, and I am glad, therefore, to see not a few Democrats manfully stand up for their old hard-money principles. May their acts be in harmony with their faith.

I do rejoice to see the Republicans of this State, and, indeed, almost all over the country, following the example you set in 1875, grow stronger in their resolution to defend the cause of honest money, true to their traditions and instincts of loyalty to the financial honor of the Republic; for they can render to the public good no better service.

The situation appears very grave. A diligent agitation seems to have propagated the paper-money mania like an epidemic. But this last blazing up may, after all, turn out to be really like the decisive paroxysm in typhoid fever, which, although apparently threatening death, is only the forerunner of convalescence. Indeed, with as intelligent and high-minded a people as the Americans, it can scarcely be otherwise. Through whatever extravagancies of imagination and reasoning they may pass,

even most of those at present earnestly opposing the reëstablishment of the specie basis, they will finally land at the conclusion that, while in the economic movements of modern society paper-money is necessary, that paper-money must be convertible into the money of the world, and that its volume and value must not be the football of political agitation. The hopeful signs of returning prosperity cannot fail to weaken the inspiration which wild schemes of relief receive from long suffered distress. The laboring man, who now imagines himself engaged in a death struggle with capital as a hostile power, and is excited by extravagant theories moving entirely outside of the boundaries of existing social order, will, as the opportunity for profitable employment returns begin to feel again that society is not only not his enemy, but ready to redress his real grievances, and that in a country like ours there is the most fruitful field and ample reward for honest individual effort. Many of them begin already to perceive that the fluctuations of an irredeemable paper-money rob the laboring man first and rob him last, and that an honest dollar is his best friend. I have no doubt that when this crisis is successfully passed, the laboring man will be the first to acknowledge that those who defended honest money, even against his own errors, were the truest defenders of his interests.

But at present the duty of the hour calls upon every patriotic man for an honest effort to put an end to the senseless and destructive agitation which prevents the revival of business and the return of prosperity. There is scarcely a sane man in the country who will not admit that at some time the restoration of the specie system must come. The question is, whether it is to come now and bring with it public repose and a fruitful employment of the social forces, or whether it is to come after new and disastrous convulsions. We can never be better prepared

for it than we are to-day. Our National debt, formerly held abroad, has returned to our shores; our National credit is good beyond precedent; our products, exported in an abundance never seen before, find a profitable market; current prices are on the gold basis; our Treasury is well stocked with coin. If not now when can we ever expect to restore our money system to a solid foundation? Can any sensible man desire to see the country exposed to longer suffering from the disastrous effects of uncertainty?

There are in Europe nations groaning under the curse of irredeemable paper-money. Every one of them is painfully struggling to deliver itself of the evil. Every one of them envies us our glorious opportunities. Is it possible that we, proud of our popular intelligence, should hesitate to use them?

History shows us examples enough of peoples floundering among wild theories and schemes while under the influence of an irredeemable money they could not get rid of. But you will search the annals of the world in vain for an instance of a nation that was able and fully prepared, after long agonies, to return to a sound money system, and then wantonly run away from it. Will the American people be the first to present to the world so crazy an exhibition? It would expose us to the ridicule and contempt of mankind.

I read in the public journals of an orator speaking to citizens of Ohio, and declaring that the resumption act must be repealed before the 1st of January, and that if it is not, blood will be shed to prevent its execution. Can it be that there are men in this State ready to shed blood in order to escape the dreadful chance of exchanging their greenback for a gold dollar? If there are indeed persons who give such counsel, and victims so violently demented, the delirium must have reached a phase where it is impossible to draw the line between the sublime and the ridiculous. But whether there be or not, let the solemn duty of this hour unite all patriotic men in an earnest and active endeavor to prove that the American people are an honest people, scrupulously faithful to their National obligations, and a wise people, who, although not always exempt from temporary gusts of excitement and the invasion of erroneous doctrines, yet at last always follow the dictates of calm judgment and sovereign common-sense.