CHANGE OF CURRENCY NO BENEFIT.

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compels such sacrifice is tyrannical and unconstitutional. Government officers in California can do with Treasury notes as they do at the East, to wit: fund them in six per cent. bonds, the coupons to be paid in gold. This should not be counted a great hardship.

It results from these premises that it is useless and tyrannical to coerce a population of four hundred thousand to suffer an indescribable injury and injustice, on the subject of currency, because a few hundred office-holders and contractors are paid by the Government in this currency, especially as making this currency universal will not help their case in the smallest degree. It may, and often does, injure the holder of gold that the prices of property should be above a just gold value, when quoted in currency; but it never works any injustice to the holder of paper, because paper prices are always above gold prices. Therefore all the arguments by the champions of paper for a change of our currency are not only sophistry, but in reality absurd. In like manner it would not be of the least advantage to the Federal Government that California should change the currency from gold to paper; for in any case the Government will pay out the legal tenders at par on its undertakings.

The injury of the Eastern currency has been borne by California in silence, as it only bore upon the prices of such goods as she imported. But when it comes to destroy the validity of our domestic contracts, as does the legal tender notes, and this, too, without the slightest advantage to the Federal Government, we have just grounds to seek redress and reform of the grievance. The tender is thrust upon us, and every dishonest debtor, who intends to pay at all, avails himself of the legal tender protection, to pay his creditor in a currency most frightfully depreciated, and the extortionate gain inures to his own advantage. The channels of business are blocked; the loaning of money is stopped; for no capitalist will loan gold when he knows that the law justifies the debtor in paying his debt in a currency so inferior to gold. If the legal tender be forced upon us permanently, our State debt will increase with fearful rapidity. If our currency be changed from gold to paper, and paper so much depreciated, the advantage will neither inure to

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THE GOLDEN STANDARD

the benefit of our State, of the Federal Government, or the people generally. In such case our gold will become merchandise, and the Rothschilds, the Barings, the Hopes, and other giant capitalists of the old world will, through their agents, monopolize the whole. The change to us would work our most certain ruin. To preserve California from the immense vortex of bankruptcy which is threatening to deluge the old States of the Union, requires the most careful, yet the most bold and determined line of action in the premises. The golden standard of value must be adhered to by her, in spite of any and all opposition.

By some it may be thought that the law of Congress, making a legal tender of paper, must be of universal and equal action throughout the Union. That which is tender in New York must be tender in every State. Such is not the case in this instance. The only possible right the Government can have to issue any bills of credit, is derived incidentally, and very doubtfully, too, from the necessities of war. But the necessities of the war do not impose upon the Government the introduction into this State of a system of currency which will impair the validity of contracts, and destroy the most perfect currency on earth. This doubtful power of taking the property of our citizens by legal tenders at less than its value, should never be exercised by a Government, except at the call of the most stern necessity.

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The Treasury Note Bill makes the issue under it legal tender for all claims and demands, public and private, except for interest upon bonds of the Government, and duties on imports." Here, then, the bill excepts certain cases in which the notes are not legal tender. Now, if Congress has power to make a legal tender, and at the same time to except from its action certain duties due the Government, and interest due from the Government to the holder of bonds, then it may go a step further and enact that the States of California and Oregon shall be exempted and free from the legal tender clause of the bill. The reasons for this exemption are, that these States have commenced and continued a system of finance on the basis of gold for all their transactions, and that the change

SHOULD BE MAINTAINED.

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to paper will be, to them, unjust and tyrannical in its. bearing, and useless to the Federal Government.

The legal tender is not onerous upon other States as upon California. Their currency has, for more than half a century, been a debased one-one subject to panics, revulsions, suspensions, failures, and all their attendant evils. The losses, resulting from such an unsound system of currency, are manifest in the fact that ninety-five per cent. of all the trading and manufacturing classes fail outright, or die insolvent. Still the system is continued to them by their own persistent action and choice. gains and their actual capital, as well as their lives and industry, are all a prey to the insatiable greed of banking institutions.

Their

Gold enough has gone forward to relieve all their wants, and give them the soundest currency on earth: but they preferred the paper, and the paper has banished the gold.

If the war destroys the system of debt banking and organizing credits into currency, posterity may pass to its credit five hundred millions of dollars; provided the Federal Government will take the matter in hand and institute such legislation as will render it impossible for currency to exercise any pernicious influence on the value of gold. With what gold coin we now have in the United States, and California yielding fifty millions of gold yearly, and the fact demonstrated by experience that all of the wealth and industry of the nation, and a population of thirty-two millions may be moved, produced, and kept actively employed with a currency of six hundred millions of dollars, let us not jeopardize our commerce, our manufactures, our mineral wealth, our agriculture, and all our immense interests, by building them on any other basis than a gold currency, or paper representing gold, dollar for dollar. Let us not adopt in war any permanent system which will be destructive to our interests in time of peace. If the Federal Government legislates for the Union at large, and for the States of the Pacific in particular, she will institute no permanent enactment to demonetize gold, or lessen its normal value in the markets of the Union.

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THE CURRENCY QUESTION SETTLED

The preceding paper was published in November, 1862, a few days before the session of the Legislature. During the session the subject was considered with solicitous attention by the members, and the following resolutions were introduced, which were made the special order for the time appointed:

"WHEREAS, The ever loyal people of this State, upon forming their State Government, and being admitted into the Federal Union, found the then Territory of California to be a gold-bearing country, and, in view of that fact, adopted in their Constitution and in their polity and system a metallic currency, as a sole and only circulating medium, and ever since that time have pursued such system, to the exclusion of all banks of issue, and against a paper currency;

"AND WHEREAS, In consequence of said fact, and of other circumstances peculiar to this State, the law of Congress making United States Treasury Notes legal tender in payment of debts, works a hardship and public inconvenience to the citizens of California, far beyond that of any other State or people, and is not followed by any benefit or advantage to the Government of the United States. Therefore be it

"Resolved, By the Assembly of the State of California, the Senate concurring, that our Senators in Congress be instructed and our Representatives requested to urge these facts upon Congress, and to show to the general Government that said law operates to derange the finances of California, to create insecurity, alarm, and uneasiness, to assist unprincipled persons to defraud their creditors out of a portion of their just debts and dues, impairs the resources of the State, and materially weakens her power to aid our common country in this dark hour of her troubles without benefiting the good cause to any appreciable extent. And be it further

"Resolved, That our said Senators and Representatives in Congress be instructed and requested to use all loyal and honorable means to obtain the passage of an act of Congress exempting the State of California from the operations of said law.

Resolved, That the Governor be requested to transmit copies of these resolutions to our Senators and Representatives in Congress."

BY THE SPECIFIC CONTRACT LAW.

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The discussion of the subject in that Legislature, however, to their lasting honor be it remembered, loosed the Gordian knot; and, without any damage to the Federal Government, enacted a law which saved the State from bankruptcy and ruin. They wisely foresaw that any legislation by Congress would be too slow, and was quite too doubtful to depend upon for the relief of the pressing calls of the State. The Specific Contract Law was enacted, and stands to this day a proud monument of the wisdom of its makers, and is fully endorsed by every intelligent and honest citizen in the State. Time will increase its popularity, and demonstrate its wisdom and justice.

TESTIMONY

No. XVI.

PAPER CURRENCY.

OF STATESMEN, FINANCIERS, ECONOMISTS, PHILOSOPHERS, AND PHILANTHROPISTS, UPON THE SUBJECT OF PAPER MONEY.

"In exact proportion as a nation alloys the precious metals, or pours paper money into the volume of the circulating medium, just in that proportion will everything in a country rise."-George Washington.

"Paper money will not benefit the farmer or mechanic. It will only benefit the debtor, as it will enable him to pay his debts with a shadow instead of a substance.”George Washington.

"A nation that can legislate a permanent value into a paper currency, will be a nation without a parallel on the globe."-Swedenborg.

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Banking in the United States is the most unrestrained and unsafe that there is in the world.". -Thos. H. Benton.

"It is essential to every modification of the finances, that the benefits of an uniform national currency should be restored to the community."-James Madison.

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