FIXED BY THE GOVERNMENT.

41

It

lative enactment, and you change the value of everything that is measured by the dollar. Fixity and uniformity of value is one of the indispensable requisites of national coin. Without these requisites anything and everything that circulates as money-be it currency, circulating medium, bank notes, or anything which the wit of man can devise, -all else, and everything else, which does not possess this uniformity of value, is a fraud upon the country and hostile to the permanent welfare of the body politic. is this uniformity in the value of gold coin which makes it so peculiarly fitted and adapted for the precise wants of a nation in the matter of its currency. No doubt supply and demand have their efficient bearings in fixing the value of gold as they have in adjusting the value of commodities and property; but gold seems to make business for itself wherever it goes, being essentially and intrinsically valuable, which function the substitutepaper money--does not possess. Not possessing this value in itself, it is impossible to galvanize it with any permanent vitality, or even utility, by Legislative enactments. Gold, by its uniformity of value for long periods of time, seems to be almost miraculously designed by the Creator to serve mankind in the matter of a sound and

reliable currency. A gold currency builds up all forms of useful industry, while a paper currency converts these industries into legalized gambling. The value of gold, however, cannot be tested by comparing it with the fluctuations in price of any one article or commodity. If all the commodities and wealth of a people rise in value when measured by gold, then gold is really depressed; if all the commodities and wealth of a people sink in value, then gold has advanced. The value of gold when tried as a standard by all the commodities and wealth of any people who use this metal as money, making a fair allowance for short and bountiful supply and demand of commodities, and of the prices of these commodities for a series of years together, this gold value will be found nearer a constant level than any other commodity in existence.

We often hear our Eastern friends crying out that gold is high, gold is rising, gold is falling, etc. Such is never the case to any extent. Greenbacks go up and

F*

42

THE PAR OF EXCHANGE.

down, but gold is fixed and constant in value. To prove this, I will state that during the four years of war, from 1861 to 1865, gold was almost uniformly of the same value in New York as in London, Paris, Hamburg, Amsterdam, Bremen, and other European cities. To corroborate it, the statistics of the rates of exchange on those cities can be easily examined. While greenbacks in New York stood at $110 for $100 coin, exchange on London ruled at 109, when purchased with gold. While greenbacks stood at 120, 150, 200, 250, 280 for $100 gold coin, exchange on London, when bought with gold, ruled at 109 to 110. During all the war it scarcely varied three per cent. from this ruling when paid for in gold coin.

The rate of exchange between the various commercial cities of the world fixes the values of the respective coins of each nation, and brings them upon a strict equality. Hence the absurdity of all legislation to fix the values of coin any different from their real values. When exchange on London, in New York, is sold at 109, the value of one ounce of pure gold in New York is exactly the same as one ounce of pure gold in London. It is reckoned on the value of the old Spanish dollar, and the pound sterling is equal to $4.44.4 of the Spanish dollar. Silver coin is only a tender up to five dollars, by the Act of Congress. The standard fineness of our gold coins was fixed by the Act of January, 1837, at 900 fine gold; expressed, 900-1000. The weight of the eagle being 258 grains; alloy, 25.8 grains, making it of fine gold 232.2 grains. The weight of the sovereign is in grains 123.274; alloy, one-twelfth-10,273; fine gold in the sovereign, 113 100.01 grains. Our dollar, not being equal to the old Spanish dollar, brings the pound sterling, or the British sovereign-which is a coin of the exact value of the pound sterling-worth in our currency $4.86.6. When exchange is at 109 on London it is at par, as will readily be seen by this formula-As 232 2-10 $10 :: 113 100.01 grs.: $4.86.6. Again-As 100: 4.44.4 :: 109: 4.86.6. And as 100: 109 :: 4.44.4 4 86.6. Here, then, is mathematical demonstration that gold has ruled almost exactly the same in New York as in London for and during the civil war ;

66
THE WORD DOLLAR" MEANINGLESS.

43

and if gold has been high or low in New York, it has been at the same price in Europe.

The practical effect of the law of Congress making a legal tender of paper money was simply to make the word dollar a meaningless term. That which before was in law a coin of the United States mint of the requisite weight and fineness, as prescribed by the laws of the mint, containing so much gold or silver, was subverted into a promise of the Government to pay, and this promise was notoriously and professedly false; for the same act which created the Treasury notes, and ordained that they should be a legal tender on all debts except on duties, imports, and interest on bonds and notes, prescribed that these promises of the Government should be redeemed by the issue of bonds, bearing interest at the rate of six per centum per annum, and redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof. (See Loan and Treasury Note Bill of 25th February, 1862.)

The Government issues these Treasury notes in sums as low as five dollars, bearing on their face a promise to pay the sum named in the note, but in fact only redeemable by funding on twenty years. Is it reasonable to think that such an issue of convertible paper could stand in the markets of the country at the par of gold? Every one knows that the Act has most signally failed, so far as keeping the Treasury notes at the par of gold was purposed to be achieved by it. Since the passage of that Act, Treasury notes have ranged from 95 down to 35 cents on the dollar. We have witnessed the absurdity of the dollar standing at all prices from 95 cents down to 35 cents, and ascending again from 35 cents to 70 cents, at which point it stands at this writing. We all know that the half of a quantity cannot be equal to the whole of such quantity; and yet we are constrained to adopt the absurdity that the legal tender paper dollar of the Government, when it is only ruling at 50 cents on the dollar, is legally equal to the mint coin of the country, which is equal to one hundred cents on the dollar. not such a result a total subversion of reason, equity, justice, and the Federal Constitution?

Is

The Loan and Treasury Note Bill of February, 1862,

44

ONE TREASURY NOTE IS A TENDER

declares the Treasury notes "lawful money, and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest" upon the public debt. This provision most effectually bars all redemption, in coin, of the said notes, unless the Government chooses to pay in coin; and it also bars all attempt on the part of the holders of Treasury notes to convert them in any other manner than as the Government may prescribe. The holder may present a note at the Treasury for payment in dollars, and the Treasurer, instead of paying in dollars, can tender another note of the same tenor, and the tender will be, according to this Act, good. Inasmuch as one note can be redeemed with another of the same amount and tenor, there can be no demand on the Treasury for these notes, except through converting them into Government bonds. The notes, then, will not vary much from the gold value of the bonds, into which they are convertible. The provision also demonetizes gold, in effect, for all purposes except duties and interest. On the 11th July, 1864, it required 285 Treasury note legal tender dollars to pay for 100 gold dollars: or, stated conversely, 35 dollars in gold coin would purchase 100 dollars in Treasury notes. This great difference in the commercial values of the two currencies the Congress would reconcile by enacting that the Treasury note should be the absolute and legal equivalent of the gold dollar in the business relations of citizens. The only gain which the Legal Tender Act ever effected for the Government was of a very ephemeral nature. It coerced the creditor to receive pay of the debtor in a currency greatly depreciated, when measured by gold. This made a demand for legal tender, as a kind of money to pay debts. But, although it extorted from the creditor a very considerable fraction of his dues by allowing the debtor to pay in a kind of tender of much less value than the contracting parties had agreed for, it was impossible to exert this influence over general values. Whoever had property for sale marked the price up, to cover the loss or depreciation on greenbacks and currency. This form of forced loan, as some choose to term the legal tender of Congress, is a direct spoliation of private rights on the part of the Government, for it is not

FOR ANOTHER OF THE SAME TENOR.

45

intended to ever compensate for such losses—although the supreme law ordains that "private property shall not be taken for public uses without just compensation,” and that all duties, imposts, and excises shall be uniform and equal. But where is the equality or consistency in compelling the creditor portion of a community to surrender the obligations of a solvent debtor upon his paying only one-half or two-thirds of it? A law of Congress compelling such injustice can never be made consistent with right reason, or the supreme law.

There is a class of our population who consider that the failure of the act to keep the treasury notes at the par of gold is not the fault of the legislation, but the action of brokers, speculators, and enemies of the Government. Such, however, is not the case. No man understands the uses and offices of money but he who has made it a special study. Congress had the power, and, in view of the necessities and exigencies of the country, it was the duty of that body to put such an excise upon the circulation of State banks as would have coerced them to withdraw all their bills from the market. The amount of this circulation was known. It was illegal and unconstitutional in its inception, and has ever remained so down to this day. No State can issue bills of credit, and by consequence no State can charter banks to issue bills of credit. A State has the same right to charter corporations to coin money that it has to charter corporations to issue bills of credit. The Federal Constitution positively forbids both. The Federal Government, if the State banks' issues were withdrawn, could have issued an amount equal to their issues, at the par of gold. It needed no coercive legislation, like that of making treasury notes a legal tender, to give them easy and quick circulation. Every dollar of paper money which circulates in any country at the par of gold, drives one dollar in gold out of circulation; and every dollar of paper money which is issued and put in circulation, after the paper circulation falls below the par of gold, is issued in dead loss to such country. For example, if the United States in 1860, when every branch of industry was flourishing, required a circulation of $600,000,000, and could circulate this amount at the par of gold, what would be the effect of suddenly expanding