1j
11
FINANCIAL PANICS
CAUSE AND REMEDY
Bim FMIIFRK SIIFER GOIIIKF
4-*^ 5 -f
CONTENTS.
PAGE
Assignats 54
Allison, Senator, on crime, 1873 59
Bank failures 2, 6,15, 23, 48
Baltimore riot 26
Bayard, Thos. F 20
Bankrupt law, 1841 6
Beck, Senator, views of crime 1873 59
British India 53, 63
B. & O. stock 8
Bond sales 42
Bonds, state, heavy depreciation 7
Buchanan, President, inaugurated 13
Cotton, etc., price, 1842 8
Democratic leader 19
Failures 19,24,29,32,34,49
Foreign debt 70
Financial panics 2,14,22, 34, 48
Franklin, Benjamin, views about money 40
French indemnity 17
Gold exports 2, 14, 21,22, 33
" imports 9, 29
" basis 49
" contracts 50
Gold bullion, value fixed 22
Garrett, James W 8
Hopkins, John 8
Indiana bonds and scrip 6,7
King Solomon .56
Mexican war 11
Money, contraction 16, 24, 27, 34, 37
" expansion 19,39,50
" views of 3, 6, 40, 50, 59, 65, 66, 68
New York bond sale 7
Ohio " " 7
Pennsylvania " 7
Silver exports 13, 14, 64
" demonetization... 57
" international agreement 60
" enormous demand 64
" value of 70
Silver coinage, great benefits 67
" " thirty-two reasons for it 68
Treasury notes, issues 3, 4, 5, 9, 10, 11,14, 17, 34
Financial Panics
CAUSE AND REMEDY
Three frightful disastrous financial panics have prevailed
throughout our country since January, 1837. Each caused to the
people incalculable losses, great poverty and untold misery, each
was of several years duration. Each was mainly brought on from
a far too contracted money circulation. Prosperity only returned
in each case mainly through a large increase in the volume of
money. A fourth panic is now prevailing without indications of
an end being near.
The First Panic broke forth with great violence in 1837 and in¬
creased with time in terrible severity, only ending during the war
declared against Mexico in 1846, which war was caused mainly by
the greatly discontented masses of idle people. This panic was
far more extensive, disastrous and of longer iluration than any
that has since occurred.
The Second Panic broke out with great force, beginning with
the failure of the Ohio Life Insurance & Trust Co. in August 1857,
followed by the failure of nearly all the banks throughout the
country. This panic only culminated during the war of the re¬
bellion. The hard times and the poverty of the masses of the
people has been ascribed by some, as one of the causes of that
terrible conflict.
The Third Panic broke out in 1873 with the startling failure of
Jay Cook, the banker, followed immediately by the suspension of
payments to depositors by nearly all the National banks through¬
out the country. But fortunately the banks were on a Greenback
in lieu of a metallic basis, which enabled them to resume payments
in greenbacks to depositors in about seven weeks. If they had
been on a specie basis they could not have recovered for several
years. Had the advice been taken given by John Thompson,
Pliny Freeman and Peter Cooper in their published letters, that
frightful, destructive panic would not have occurred.
The Fourth Panic that is now running its course, had its origin
in the first term of President Cleveland, in the rapid and heavy
retiring from circulation of National bank notes—also in the
2
heavy shipments of gold from our country which began in 1888.
Both of which heavy drains of the people's debt-paying power was
continued through the term of President Harrison; the heavy
shipments of gold still continue. The first loud warning of danger
came in July 1893 in the failure of about 600 banks. Fortunately
the banks were on a Greenback in lieu of a specie basis, conse¬
quently the failures were limited. Had they been on a gold basis
the crash would have been terrific.
From 1 July 1888 to 1 August 1896, $332,887,320 net of gold has
been exported from our country.
On 31 October 1882 the National bank note circulation
was $300,982,712
On 1 August 1896 it was 214,096,620
Total destroyed $146,886,092
By export of gold and destruction of bank notes, the people have
lost the use of $479,773,349 of money, while population has been
increasing nearly 2,000,000 per year. It went on gradually but
imperceptibly to the people, and has forced down largely the
price of all products and property, increased bankruptcy, idleness,
misery and crime, reduced salaries, wages and rents, forced fore¬
closures, also heavy issues of bonds to try to keep the masses em¬
ployed. Money decreasing and population increasing. Yet the
people heed not these loud warnings, nor seem to realize their
perilous situation. Should such reckless conditions continue, a
heavy crash will surely come—"Sauve quipeut."
First Panic.—On March 4, 1837, Martin Van Buren (Sage of
Kinderhook), was inaugurated president of the United States;
who, finding the financial matters of the country in an alarming
condition, immediately called a special session of Congress. By
June nearly every bank in our country had suspended specie pay¬
ments, caused by the loss of their specie basis, the gold and silver
money having been nearly all exported to Europe to pay for foreign
products which the people greatly needed. The manufactories in
our country were very limited, owing to the very inadequate
supply of money to build them. Hence the importation of foreign
products and exportation of our silver and gold money to pay for
them. Had our government kept in the channels of trade an
adequate supply of United States notes (commonly called green¬
backs), the people would have built factories, made their own
products, and largely dispensed with those of foreign countries.
Our government has up to the present continued following the
same ruinous policy by keeping a totally inadequate supply of
money in circulation for the uses of the people, to enable them to
carry on successfully their vast_internal trade; also, to build
factories and largely dispense with the importation of foreign
products, thus saving our gold and silver money from being
exported to pay for them.
After the failure of the banks their notes began to depreciate in
value and in time those of many became worthless, while others
passed, but were fluctuating in value all the while. Here was
a lamentable spectacle of an active and industrious people with
vast and growing industries, having foisted upon them worthless
bank notes, much of which was "wild cal." The bard times and
3
the ten long years duration of this most frightful and destructive
financial panic was a terrible strain upon the people, who suflfered
untold losses of property ; also, poverty and misery.
When the banks suspended specie payments our government
had on deposit with them about $40,000,000, but very fortunately
our government had in 1835 freed itself from debt.
After the failure of the banks, matters grew from bad to worse,
and there was a heavy falling off in the revenues of the govern¬
ment. Therefore to pay the expenses of the government. Con¬
gress on 12 October 1837, directed the treasurer to issue $10,000,-
000 in treasury notes ; to be in denominations of not less than
$50, to be receivable for all debts to the government, to bear such
interest as the treasurer might fix (which he fixed at one mill per
annum), and to be cancelled on receipt back into the treasury.
Those treasury notes were very ingeniously made as undesirable
as money for circulation among the people as could possibly be
done.
The government was unable to sell bonds or borrow money,
there was no other way to pay its expenses than by an issue of
Treasury notes. Yet many members of Congress opposed the
measure, especially those representing the banks.
John C. Calhoun in a speeh in the Senate upon the bill said,
"Ko one can doubt but that the government credit is better than
that of any bank; more reliable, more safe. Why then should it
mix it up with the less perfect credit of those institutions. We
are told the form I suggested is but the repetition of the 'old
continental money,' a ghost that is ever conjured up by all who
wish to give the banks an exclusive monopoly of government
credit. The assertion is not true. There is not the least analogy
between them, the one is a promise to pay when there is no
revenue and the other to receive in the dues of the government
when there is an abundant revenue."
The Treasury notes issued to pay the expenses of the govern¬
ment, were paid back into the 'Treasury for lands and custom
duties as fast as issued and then cancelled. Thus the people who
were sorely in need of a large volume of good money, to carry on
their vast and rapidly growing industries, were afforded only a
temporary use of this makeshift.
The gold and silver money in the country was very limited and
entirely inadequate, besides could not be increased.
Bank notes were very undesirable on account of fluctuation in
value, liability to be counterfeited, and when taken to other states
than where issued met heavy loss from discount under the bank
notes of such state. Also from general distrust and want of con¬
fidence in the banks.
Treasury notes were the only money that our government could
create and make immediately available and in adequate volume
for the wants of the suffering people. The people had the utmost
confidence in the government money. Yet every obstacle was
placed in the way of the treasury note being issued and made one
of the permanent and serviceable moneys for the people. They
were restricted to the use of treasury notes to be issued in de¬
nominations of not less than $50, and to be destroyed when paid
back into the ti'easury—a mockery.
4
Congress was run then as now, by the attorneys of banks, who
refused to have issued only undesirable temporary treasury notes.
They insisted then as now, that banks only should issue the paper
money for the people. Yes, bank notes that are not and cannot
be made a legal tender to pay debts, and their value to be main¬
tained by a coin basis. When the coin disappears by exportation
or otherwise, the bank note becomes worthless. Away with such
fraudulent currency ! The people have too often suffered the
pangs of poverty from such worthless bank issues.
Just as fast as the treasury notes were destroyed when paid
back into the treasury, the times grew from bad to worse and the
suffering of the people increased. Also, the revenues of the
government continued to fall off.
The government deposits of about $40,000,000 in the banks
were unavailable, as the government could not use depreciated
bank notes to pay its expenses. Consequently our government
again had to resort to the use of treasury notes. Congress on
21 May, 1838, authorized the issue of $10,000,000 in treasury notes
to be in denominations of not less than $50 and to be destroyed
when paid back into the treasury. Yes, containing
the same obnoxious conditions as those Treasury notes issued in
October 1887, as undesirable, unserviceable and as temporary for
the uses of the people as possible. If the bankers could not issue
the paper money,then they would not consent that the people should
have other than the most objectionable that could be issued.
They failed to see then just as they do now, that by preventing
the people from having an ample supply of good legal tender
government money, they were injuring the people and destroying
the banks. But they "killed the goose that laid the golden egg"
as only a few banks ever recovered from the crash. The bankers
are now endeavoring to carry out a similar policy by demanding
the funding of the United States notes and Treasury notes into
interest bearing bonds, with the view of replacing them with bank
notes on a gold basis. Bank notes that cannot be made a legal
tender, and when the basis of gold vanishes, the bank notes will
become worthless and the people be left again in a deplorable con¬
dition. Yes, without money. The bankers forget the several
occasions heretofore, when nearly all the gold and silver was ex¬
ported, causing the bankœ to fail, their bank notes to become
worthless and the people nearly ruined. "Experience is a dear
school but fools will learn no other."
An exportation of gold was commenced in July 1888 and has
been continued to the present. From 1 July 1888 up to 1 August
1896, $332,887, 320 net in gold has been exported. Suppose the
banks were now taken from their present greenback basis and put
upon a gold basis, how long could they stand the strain? At
least 50 per cent of them would fail to pay depositors within 90
days. I will show the weak condition of many of them, in this
pamphlet. Banks should be confined to legitimate banking—de¬
posits, discount and exchange, and leave the government to issue
all money.
In the discussion in the senate of the bill of May 1838, to issue
treasury notes. Senator Thomas H.Benton said; "The govern¬
ment ought not to delegate this power if it could. It is too great
5
a power to be trusted to any banking company whatever. The
government itself ceases to be independent, it ceases to be safe
when the national currency is at the will of a company."
The treasury notes of May 1838 continued to pour into the
treasury in payment for lands and customs duties and were
destroyed, and the people deprived of their use, causing the times
to continue to grow more severe, and the revenues of the govern-
•ment to fall off. The suspension of the banks continued, except
a few which resumed in New England and New York. Such were
the conditions of the country at the close of 1839. Therefore our
government was again forced to resort to the use of treasury notes.
Congress on 3 May 1840 directed the issue of $5,000,000 in
treasury notes redeemable in one year. On 4 July 1840 Congress
enacted a law forbidding the deposit of government money in
banks. Also directed that after 3 January 1843, gold or
silver coin only should be received into the treasury ; thus exclud¬
ing treasury notes. This latter clause was afterwards declared
illegal.
Such was the war then waged and continues to be waged against
the treasury note. Both Congress and President Van Buren were
unwilling to make treasury notes serviceable to the people, which
brought great odium upon the Democratic party. But the Demo¬
crats still clung to Martin Van Buren and nominated him for
president and Eichard M. Johnson for vice-president.
The great masses of the people were alive for a change. The
Whigs at the National convention nominated General William
Henry Harrison for president and John Tyler for vice president.
They erected wigwams all over the country for their gatherings,
where their orators preached the doctrine for more money. Their
famous hurrah was "two dollars a day and roast beef for dinner."
Immense gatherings were held at which fat beeves were barbecued
to feed the multitude and hard cider was doled out to the thirsty.
The writer heard many of their orators, none pjeased bim '
more than Sargent S. Prentiss of Mississippi, who was the most
eloquent and humorous of all. He always made a plea for more
money. Many discontented Democrats drifted into the Whig
party. In November 1840 Harrison and Tyler were elected by an
overwhelming majority. The people everywhere rejoiced and
sang the song, "Little Van is a used up man," and they hurrahed
for "Tippecanoe and Tyler too."
On 4 March 1841 Harrison was inaugurated president, and find¬
ing the country still in a most deplorable condition, he called a
special session of Congress, to consider mea ures of relief for the
impoverished people. President Harrison died on the 4th of April,
when John Tyler was sworn into ofläce as president. A bill
chartering a joint stock company with $50,000,000 capital, having
authority to issue bank notes based on coin, called "The National
Bank," passed both branche'sof Congress,but was vetoed by Presi¬
dent Tyler, who recommended an issue of Treasury notes. Con¬
gress attempted to pass the bill over the veto, but failed, which
action caused a wrangle between President Tyler and a majority
in Congress, which lasted during his term.
No relief came to the people ; a majority of Congress was for the
national bank, and against the issue of treasury notes as recom-
6
mended by President Tyler ; times grew harder and harder all the
while and bankruptcy became general all over the land. Congress
on 31 August 1841, enacted a plain and simple bankrupt
which went into force on 1 February 1842, and out of existen^®
on 1 March 1843. During the thirteen months existence of this
memorable bankrupt law, a large majority of the business men ol
the country partook of its benefits, which enabled them to begin
business life anew. At that time the writer and several others
were engaged in the office of McCay & Mossy, notaries at 42 Royal
street. New Orleans, protesting notes and drafts of unfortunate
merchants for the Canal Bank and Merchants Bank of that city,
frequently writing all night.
In December 1841, President Tyler in his message to Congress
recommended the enactment of a law authorizing the issue of
non-interest-bearing treasury notes, not to exceed $15,000,000, to
be made redeemable in silver and gold and receivable for
government dues ; also, the issue of certificates of deposits for
deposits of gold and silver ; but Congress failed to concur.
The Bank of the United States, a state institution with branches
throughout the country, suspended in 1841 and was a complete
failure.
In 1841, the state of Pennsylvania being in sore straits for
money to pay for extensive public works put under construction
to give employment to the great number of idle workmen, by
authority of the. legislature issued "Relief monry," not bearing
interest but receivable for all taxes due the state, which currency
passed current with the business men and afiforded much relief.
The state of Indiana, also, being greatly in need of money,
issued non-interest bearing warrants, which were made receiv¬
able for taxes, and passed current, affording great relief to all.
The population was all the while increasing, but the money
supply continued contracted, which caused the continued decline
in rents, real estate, products, salaries, and wages, forced the
great masses of the people to become more and more impoverished
and eventually so poor that very many could neither pay rent-i,
interest nor taxes. Persons who had loaned money on country
and city property were in most cases forced to take it for the debt,
and most property, even the improved, being unproductive was
allowed to be sold for taxes. State and municipal governments
failing to collect taxes, were forced to default in paying interest on
tbeir bonds. The holders of those bonds not receiving their in¬
terest, were compelled to sell them and in some cases at a very
heavy discount.
In the summer of 1842, the consolidated association, Union and
Citizens banks, which had struggled along failed. The state of
Louisiana had largely aided those banks. Their failure very
seriously affected the sugar and cotton planting interests.
Confidence played out, credit became greatly restricted, which
caused a heayy demand for money, but it was not to be had.
Here are extracts from an address delivered by Senator
Gallinger in the United States Senate on tariff, which shows con¬
ditions then existing :
"The revulsion of 1837 produced a far greater havoc than was
7
experienced in the period above mentioned. (Repeal of the
tariff of 1816.)
"The ruin came quickly and fearfully. There were few that
could save themselves. Property of every description was parted
with at prices that were astounding, and as for the currency,
there was scarcely any at all."
(Dr. Gallinger here quotes from a speech of Henry Clay.) _ "In
some parts of Pennsylvania the people were obliged to divide
bank notes into halves, quarters, eighths, and so on, and agree
from necessity to use them as money. In Ohio, with all her
abundance, it was hard to get money to pay taxes. The sheriff of
Muskingum county, as stated by the Guernsey Times, in the
summer of 1842, sold at auction one-four-horse wagon at $5.50 ;
ten hogs at 63^ cents each ; two horses (said to be worth $50 to $75
each) at $2 each ; two cows at $1 each ; a barrel of sugar at $1.50,
and a store of goods at that rate. In Pike county. Mo., as stated
by the Hannibal Journal, the sheriff sold three horses at $1.50
each ; one large ox at 12)4 cents ; five cows, two steers and one
calf, the lot at $3.25; twenty sheep at 13>^'cents each; twenty-
four hogs, the lot at 25 cents ; one eight-day deck at $2.50 ; lot of
tobacco, seven or eight hogsheads, at $5 ; three stacks of hay, each,
at 25 cents, and one stack of fodder at 25 cents." (Colton's Life
of Henry Clay, Vol. 1.)
" The whole country went into liquidation; bank loans and
discounts fell off more than one-half; the money loss to the
country was not less than $1,000,000,000, to say nothing of the
tremendous strain upon the moral sense of the people.
"All prices fell off ruinously; production was greatly diminished
and in many departments practically ceased ; thousands of work¬
men were idle, with no hope of employment, and their families
suffering from want. Our farmers were without markets ; their
products rotted in their barns ; their lands, teeming with rich
harvests, were sold by the sheriff for debts and taxes. The tariff
which robbed our industries of protection failed to supply the
government with necessary revenues. The national treasury, in
consequence, was bankrupt, and the credit of the nation very low."
Senator Gallinger attributed the hard times of 1842 to the then
existing low tariff. He is in error. It was not tariff that brought
the ruin, because Congress in 1842 changed the low tariff to a
high tariff which continued in force until 1846. Yet the hard
times and ruin continued on into the Mexican War, when good
times came through a very large increase of money in treasury
notes, bank notes and gold, which latter came from California.
By November 1842, bonds of the states named below had
greatly depreciated and sold as follows, to wit ;
New Y ork at 80 cents on the dollar.
Pennsylvania "70 " " " "
Ohio "50 " " " "
Maryland " 35 " " " "
Indiana "19 " " " "
Illinois " 16 " " " "
(See N. Y. Journal of Commerce, or Baltimore American of
November, 1842.)
8
Also, farm products about the same time sold from the farmers
wagons in the towns of Ohio, as follows :
Wheat at 40 cents per bushel.
Flour at !|il per hundred pounds.
Dressed hogs at ifl.25 to $1.75 per hundred pounds, the latter
price for extra fat hogs, to be rendered into lard oil for lighting
cities, towns, and dwellings (coal oil was unknown then and gas
not much used. 1
In New Orleans, whiskey sold from the flat boats in dray lots of
5 barrels at 12 cents per gallon. Those days much of the whiskey,
bacon, corn, lard, etc., was carried down the Mississipi river in
flat boats.
In New York city about same date wholesale prices were as
follows :
Cotton g. o per lb 7 cents
Flour, choice family... " barrel $4 50
The late John Hopkins, founder of John Hopkins university,
borrowed money in Europe in 1842 and bought largely of Mary¬
land bonds at a heavy discount, which he held till they reached
par. Afterwards he invested largely in stock of the Baltimore &
Ohio R. R. Co., which at his death he willed to the university.
In 1889 this stock was worth about $225 per share, now it is sell¬
ing at about $13.
Speaking of B. & 0. stock reminds the writer of two prediction
he made about it. At Baltimore in 1873, while on basiness in the
Peabody Insurance Co., he said to Mr. Thomas I. Cary, the pren-
dent, that B.& O. stock then worth $185 per share, would notin
a few years be worth half that sum, which result came by Is",
giving as his reason the contraction policy that had been and was
then going on. In October 1889 at the same place, while B. iO.
stock was selling at $225 per share, he predicted to Mr. Carey, that
within a few years this stock would sell for less than par (fUic.
His friend laughed, but the writer said to him, that like canoes
produced like results, that contraction of the money volume was
again at its destructive work as it was in 1873.
Also, James W. Garrett, another Baltimorean laid the foundation
of an immense fortune in the purchase of Indiana bonds ata
heavy discount. He refused to accept the scale down from the
face value made by the state, but held them until the times be¬
came prosperous, when he received the principal and interests
full. He was the founder of the B. & O. railroad and at his death
left an immense investment in this stock to his daughter Mary
Garrett, now a prominent woman of Baltimore. Yet with all the
warnings of wreckages from contraction, that has occurred in oar
country at different times, the bankers of Baltimore through their
associations have declared for the retirement of the greenbacks
and substitution therefor of National bank notes on a gold basis.
Also for the continued suspension of the coinage of silver. Their
memory about bankruptcy witb its ruin is short.
Those days (.1843) there was very little money in circulation for
farming, manufacturing, steamboat, ship, store and house build-
Sugar, la brown
Tobacco, Va. leaf
Wheat, choice ..
per bushel
(t
t i
5 "
3 "
85 "
9
ing. Consequently there were an immense number of idle people,
competition was very great, and salaries and wages very low.
Bank cashiers who in 18.36 had received $2000-10 $3000 per annum
were reduced in 1842 to $60O to $900 per year ; clerks from $75 to
$100 per month to $15 to $40, and carpenters from $2.50 to $3.00
per day to 65 to 75 cents per day. The most odious laws were
enacted to prevent vagrancy, without avail. The idle were
marched daily in gangs before magistrates and committed with¬
out other trial than the judgement of the magistrate, to six and
twelve months confinement in the workhouse. The writer has
frequently seen at New Orleans as many as a dozen committed of
a morning to the workhouse by Recorder Joshua Baldwin. Bread
riots occured in many of the large cities and only the strong arm
of the law prevented terrible scenes.
In New York city in November 1836, when there was more
money and greater confidence among the people, prices were as
follows :
Cotton, g. o., per fi> .18
Sugar, La., brown, .. " .08
Tobacco, Va. leaf, ... " .09
Wheat, choice, per bushel $ 1.90
Flour, choice family, " barrel 10.00
(See N. Y. Journal of Commerce.)
The people then were more prosperous. What gave it? More
money. It created confidence which backed up the credits re¬
quired to run commerce. It was not tariflf that was causing the
hard times, because they continued until 1847 when the money
volume was largely increased and prosperity came with it. No, it
was scarce money only which brought the hard times.
In 1843 there was quite a heavy importation of gold and silver,
amounting to about $21,000,000, which was coined that year and
the next, which aided somewhat in reviving banking interests and
thus afforded the suffering people a little more money, which gave
some relief, but was entirely insufficient, and the times still con¬
tinued very hard and there were still great numbers of people un¬
able to procure steady work, which caused much misery and great
discontent to prevail among the masses.
In the summer of 1843 there was a great riot in New Orleans
against the money brokers (called "money shavers" and their
offices called "shaving shops"). An immense crowd composed of
butchers, bakers, and the laboring people were seen just before
noon emerging from Chatres and Old Levee streets, crossing Canal
street ; on their arrival at Camp they smashed in the bay windows
of the shaving shops and scattered the notes of the broken banks
and gold and silver coins that were left in them to catch the eye
of the passerby. The rioters then made for the City bank, but
before they had effected anything, the military arrived on the the
ground and dispersed the mob. The money shavers were charged
with causing the depreciation of the shinplasters of the First, Sec¬
ond and Third municipalities. The writer was then in a "sharing
shop" on Canal, street one door from Camp.
In December 1843, President Tyler in his message to Congress
again recommended the issue of Treasury notes, and urged their
10
issue "Id denominations of not less than $5, nor more than $100.
to be employed in payment of the obligations of the government,
in lieu of gold and silver at the option of the public creditor, to the
amount of $15,000,000."
Also, he urged it "In view of the disordered condition of the
currency and the high rate of exchange between the different
parts of the country." He stated that it would "save the country
a large amount of interest, while it affords conveniences and obvi¬
ates dangers and expense in the transmission of funds to disburs¬
ing agents." Congress was then as now dominated over by
the paid attorneys of bankers, who refused to heed the words of
wisdom given in that able message. President Tyler was bitterly
opposed to the use of bank notes, knowing the frequent and heavy
losses the people had sustained when the banks failed, from being
forced to use their bank notes.
The writer remembers a loan of $100,000 in Mexican dollars
made by the Mechanics and Traders Bank of New Orleans through
George Morgan its president, to the Canal bank represented by N.
N. Wilkinson, which enabled the latter bank to resume payments.
The silver in small boxes containing $1,000 each, was hauled on
drays from the mint on Esplanade street to the Canal bank, which
was then occupying the banking house of the old bursted
Atchafalaya bank, on the corner of Magazine street and Natchez
alley.
Bankers then as now were not willing to follow the legitimate
business of banking, such as discount, deposits and exchange, but
insisted, then as now, that they also have the power to issue the
paper money to gain the large profits arising from loaning their
bank notes, also their destruction while in use. They never have
and never will listen to the government issing the paper money.
Hence the interminable war that has been and is still being waged
between the people and the bankers, regardless of tbe fatal conse¬
quences to botb.
In November 1844, James K. Polk and George M. Dallas were
respectively elected president and vice-president over Henry Clay
and Theodore Frelinghuysen, the main issue being the annexa¬
tion of Texas, which the former advocated and the latter deprecated.
Gn 4 March 1845, James K. Polk was inaugurated presi¬
dent. He selected Robert J. Walker of Mississippi for secretary
of the treasury.
The times still continued distressingly severe, which again
forced our government, in order to pay its expenses, to issue
treasury notes. On 26 July 1846, Congress directed the issue of
$10,000,000 in treasury notes.
On 6 August 1846, Congress enacted the independent treasury
law, which directed that only gold and silver coin and treasury
notes be received into the treasury in all payments to the United
States. Also, that all government money be kept in the treasury.
The great mistake in this law was the omission to make the
treasury note a full legal tender to pay all debts, and to increase
the volume adequate to the wants of the people of this vast nation,
and who then were suffering the torments from nine years of rigid
economy, arising from a totally inadequate supply of money. But
there was that continual cry of unconstitutionality of government
11
paper money. Yet in every instance when it was in trouble and
short of money, our government liad been forced to issue treasury
notes.
In 1846 Congress enacted the celebrated law, called the "Bob
Walker Tariff." A tariff for revenue, over which there has been
so much discussion, in and out off Congress, as to its benefits to
the people. It remained in force until 1857, when during the ad¬
ministration of President Buchanan the tariff was reduced about
20 per cent, which law went into force 1 July 1857. Democrats
have claimed that it was this tariff which brought the era of pros¬
perity that existed from 1847 to 1857. "But full relief from the
frightful depression that existed all over the country and which
began in 1837, only came to the people about the close of the war,
declared in 1846 by our government against Mexico (many have
alleged that was unjust). It was the idleness and poverty of
the masses of the people which forced the war. The hordes of
idle rejoiced at the opportunity to enlist in the army, the doors of
the workhouses, where vagrants were confined, were opened
and the inmates liberated to join the army, which they gladly did.
On 28 January 1847, our government again made use of the
Treasury notes. Congress having directed the issue of $23,000,000
to pay for supplies for the army and to pay the soldiers. This
large and rapid addition to the money circulation gave an im¬
petus to business all over the country and considerably revived the
banking interests, increased the demand for and raised the price
of all products of the soil and factory, increased the demand for
labor, and raised wages. Thus a healthy condition was brought
to the country. But to add immensely to this improved condition
was the discovery and rapid mining of the marvelously rich placer
mines of gold in California, which the tens of thousands of honest
and willing workers, who travelled over the plains, delved in the
sands and gravel, took out the precious metal and sent it pene¬
trating every avenue of the channels of trade.
The soldiers under General Scott were ■ paid in Mexico in
treasury notes, which they exchanged at a premium for Mexican
dollars and brought back. When the war was over and the
soldiers discharged from the army, they immediately found plenty
of work at liberal wages. To the very large increase of money in
treasury notes, bank notes and gold, alone can be attributed the
abundant prosperity, which came to the people within a short
period after the close of the Mexican war. They whose faces had
been wrinkled with despair, wore smiles of joy. Vagrants who
tiad been made villains through poverty, no longer tramped over
the land for work, which not finding, caused them to plunder.
Everyone wanting work found em[Joyment at good wages. Idle¬
ness, poverty, misery and crime ceased. Products of all kinds
brought good profit to producers. City and country property ad¬
vanced rapidly in value, and slaves in the south sold higher than
ever. What wrought this wonderful change? Money largely
increased in volume was the power which brought the glorious
good times and produced so rapidly the happy results. Demo¬
cratic politicians claimed it was the reform tariff, called the " Bob
Walker tariff, enacted in 1846, which brought " the development
of great vigor in manufactures, with steady employment and an
12
increase in wages for labor." But such was not the fact, because
from 1837 to 1842, a reform or low tariff was in force and intensely
hard times existed. In 1842 Congress raised the tariff to a high
or protective tariff, which continued in force until 1846, when the
reform tariS was adopted. Yet all this period frightfully hard times
existed and continued on until prosperity came in 1847 through
the greatly enlarged money circulation.
Politicians of both parties liave ever been within the knowledge
of the writer declaiming about tariff. Whigs and Kepublicans
for a little higher and Democrats for a little lower tariff. The
former declaring they were for protection and the latter that they
were for revenue, yet the precentage of difference was small. The
object has always been to detract the people from the financial
question, the vastly most important for their welfare of all otlier
issues. The bank power has always been behind to keep up the
agitation. Bankers have never been content to do the legitimate
business of banking, euch as deposits, discount and exchange, but
have always contended for the power to issue bank notes, that they
might have the large profits on the notes destroyed while in use.
Now is the opportune time for the people to throw off the yoke and
leave party aside, drop the tariff and investigate this great money
question.
This period of activity following the close of the Mexican war
and working the gold mines of California brought a heavy demand
for railroads, and products of all kinds. There was a grand op¬
portunity offered for the continuance and permanence of prosperity
which could have been accomplished through a large increase of
money. With money, iron, cotton, and other manufactories could
have been erected and the iron for railroad building made at
home and the foreign article dispensed with; also raw cotton and
wool would not have been sent abroad, there manufactured, then
returned to us for consumption. Oh, no! This would be too good
for the people! The money brokers were selfish, they wanted the
profits in selling our bonds abroad. They did not care how
colossal a debt would be piled up against us abroad or the enor¬
mous interest to be sent to the "money kings" of Europe. The
debt now amounts to about $3,000,000,000, and the annual interest
about $150,000,000.
The money could haye been provided in the building up of our
country, by an issue by our government of an ample volume of
full legal tender treasury notes, issued and placed in the channels
of trade in payment for greatly needed internal improvements.
But our congressmen failed to grasp the situation. They could
not fathom the vastness of our country nor the immensity of the
wants of the people in building it up. They could not see that if
the gold was sent abroad to pay for for foreign products, the basis
would be taken from the bank notes, the banks would fail, then
both gold and notes would be lost to the use of the people. They
let the opportunity slip and as a result importations of foreign
products were enormous and nearly all our gold and silver money
was sent abroad to pay for them. This enormous importation of
foreign products set in about 1850, and was kept up right along,
and just as fast as our mines turned out the gold it was exported
to pay for those foreign products. At the same time any of our
13
people who had good enterprises, not finding money in our
country, had to go to Europe and sell their bonds, frequently at a
large discount, and thus the enormous foreign debt has been piled
up against us. Our money circulation was always entirely in¬
adequate, which forced an enormous credit system, only to burst
in a few years and bring ruin. Our boy was too big and grow¬
ing too fast for hie breeches.
Within a few years the treasury notes issued in carrying on the
war against Mexico were paid into the Treasury for custom duties
and lands, then cancelled. Tbus so much debt paying power
went out of existence.
Heavy Demand for Silver.
There was considerable foreign silver in our country, much of
it Mexican, which our soldiers brought with them from Mexico
that they obtained in exchange for treasury notes. The silver
coin was a legal tender and held by the banks for their reserves.
After the opening of the Asiatic ports there came a heavy demand
for silver. The great banking firm of Rolhschilds Money Kings of
Europe through their fiscal agent in this country. Mr. August
Belmont in New York City, and Mr. Isaac Nathan Hanau in New
Orleans, quietly began the purchase and exportation of our silver.
For quite awhile it was not known whither this silver was being
exported. Finnaliy it was found out that it was being shipped
to Europe, thence to Asiatic ports where in the beginning it was
worth 5 to 1, giving the Rothschilds an enormous profit.
By 1853 small silver coins had become so very scarce that it
was made diflficult to obtain silver change fora 5-dollar gold piece.
This great scarcity of subsidiary of silver money forced Congress
to enact on February 21, 1853, a law bebasing about 7 per cent
the subsidiary silver coins by reducing the number of grains of
pure silver in the two half dollars, four quarters and ten dimes
from 371.25 grains to 447.22 grains, at which they are still being
coined. The action was taken by our government to prevent the
further exportatton of onr silver coins from the country but was
not successful.
From 1 July 1846 to 1 July 1853 $93,313,498 net in silver was ex¬
ported from our country (see mint report 1895 p 295). Mr. Isaac
N. Hanau was a nephew of the Vienna Rothschilds and became
quite a noted person in New Orleans, a small man, large head,
large eyes, large Roman nose, large legs, bow legged, always wore
a bland smile, walked rapidly and dressed well. As he passed by
every stranger was sure to gaze after him. Italian workers in
plaster paris caricatured him to perfection in plaster size, about
one foot high, which they sold to business men. This aggravated
Mr. Hanau exceedingly. He finally bought them oflf, had the
moulds, also caricatures gathered as far as possible and destroyed.
He was an affable, pleasant, prompt and good business man.
The .writer was well acquainted with him.
Franklin Pierce was inaugurated president in March, 1853. He
was a good man, but not a financier. He went into oflSce in a
period of fair prosperity, brought about by the large production of
gold in California, which was diffused over the country only to be
gathered and concentrated at New York city for export to Europe,
14
to pay for foreign products. Such was the condition throughout
his administration. Import of foreign products, export of gold,
and the piling up of an enormous foreign debt for our people to
pay interest upon for years to come. Not a healthy aspect, but
just as our people had done before, did then, and are now doing.
They seem blind to their interests. The demonetization of foreign
gold and silver coins, which was solely in the interest of the
" Money Kings of Europe," just as the gold and silver had been
largely exported and the banks deprived largely of their coin
basis (thereby much weakened in consequence), was the closing
and most unfortunate legislation of his administration.
In 1856 James Buchanan was nominated and elected president
and was inaugurated 4 March 1857.
Second Panic.—At that time our country was in a very critical
condition, owing to the heavy contraction of the money circu¬
lation. Treasury notes, several years previous, had been received
in the treasury and cancelled. Silver and gold had been largely
exported and the legal tender had been taken from all the foreign
gold and silver coin,that were in our country. From July Ist, 1848,
to July Ist, 1857, the enormous sum of $267,968,454, net in gold
and silver had been exported (see mint report of 1895, pages 295
and 296). During the the same period the imports of foreign mer¬
chandise exceeded in value the exports of our products by $346,598,
184. (S. A. U. S. No. 13 p 61)
The exportation of this enormous amount of metalic money took
from the banks their coin basis of legal reserves, required to be
held to secure payment of bank notes and money due depositors.
Also took away the backing from the vast credits required to carry
on the immense internal trade of our country.
The enactment of the law taking tlie legal tender from the gold
and silver coins, depriving the banks from holding them in tbeir
reserves, also the people from using them to pay debts, was done
in the interest of the " Money Kings of Europe ", to facilitate its
exportation. It was reported shortly after the adoption by con¬
gress of this ill advised measure, that August Belmont, fiscal agent
of the Rothschilds, was the instigator. He had a pull on the De¬
mocratic party, as he had subscribed $50,000 to the Buchanan
campaign fund, which helped to secure his election to the Pres¬
idency.
Bank notes and a yery limited amount of gold and silver coin
only were left to the people. The revenues of the government had
been much reduced, its credit weakened, and bonds could not be
negotiated, except at a heavy r^te of interest. Consequently our
government again resorted to the use of Treasury notes to pay its
expenses and $20,000,000 were issued, which were made receivable
for all payments to the government.The contraction policy was also
telling sorely upon the people and the banks. Here was another
opportunity offered the government to relieve the people by an am¬
ple issue of legal tender notes, but the money power would not con -
sent to the government issuing paper money. Finally the strain
of contraction became so tight that the break had to come, and the
people were startled with the failure of the Ohio Life Insurance <fe
Trust Company of Cincinnati, then considered one of the strongest
15
and most reliable institutions of the countr)'. The New York
branch went to protest, August 1857, hence the collapse.
The failure of about three-fifths of all the banks throughout the
country followed ; those which escaped from being engulf¬
ed were left in such a helpless condition as to be of
little service to the business people.
The bank notes soon depreciated in value, money became
worthless and the holders as well as the depositors in the banks
were left wailing over their misfortunes. Widows as well the
aged, who had their all in the banks were in sore grief and in a
most deplorable condition. The collapse of the banks was sud¬
den, yet the cause, which was the loss of their gold and silver
coin basis decreasing the volume of money, had been growing
for a number of years. >
Thus again was presented the melancholy spectacle of a great
and progressive nation deprived very largely of its circulating
medium. Thus came that disastrous financial panic of 1857 with
all its direful results, culminating only in the war of the rebellion
and believed by many to be,owing to the poverty of the masses of
the people, one of the causes of that most unfortunate fraternal
strife.
This panic caused solely by the loss of a large volume of money
from the channels of trade, brought general bankruptcy and wide
spread ruin, heavy reduction in wages and salaries, in many cases
50 to 75 per cent, large decline in the value of real estate, and in
prices of all products. Idleness, poverty and misery had sway and
a dark pall hung over the land.
Decline In Salaries.
Illustrating the decline in salaries during this panic, there ap¬
peared in October 1892 in the Pioneer Press of St. Paul an article en¬
titled "Some Free Advice to Clerks to accept Salary Re¬
ductions Cheerfully," written by Mr.N.P.Langford, who stated that
he was cashier of a bank in that city in 1857 which failed, and he,
up to that time, had received a salary of $2,500 per year. That
in 18 58 another bank was organized, and owing to his long experi¬
ence as a banker, he was oflfered the position of cashier at a salary
of $600 per year, which he, owing to the hard times, cheerfuly ac¬
cepted, being a reduction of over 75fcent. "Mr.Langford states that
hard times are coming again, hence his free advice to young men
to cheerfully accept the situation in a reduction of salary."
In the face of that most disastrous and frightful panic of 1837,
which lasted ten long years, the bankers and business men did
nothing to avert this bankrupting cyclone of 1857. On the contrary
the measures enacted by Congress only hastened it on. Still
with the loud warnings of 1837, 1857. 1873, and the slight shock
in 1893, the bankers generally of our country are now doing much
to strengthen and intensify the impending storm, brewing all over
the country, the severity of which owing to the immense wealth
may be more severe than any panic heretofore.
Warning.
Manufacturers, merchants, farmers and toilers, take heed of the
16
sad experience of the past, and endeavor with all your might
through honest legislation, to avert its further progress. Money
is the power and its large increase in the channels of trade is the
only remedy. It is now, with the destuction of conhdence in the
banks and business men generally, absolutely needed in larger
volume tban ever to back up the immensely vast credits required
to transact the prodigiously enormous internal trade of our country.
As confidence ekes out, credits play out, then greatly more money
is needed, such is the condition at the present time. The wealth
of our country is estimated now at seventy thousand million dollars
(or seventy billion dollars). The stock part changes hands largely
in the year, real estate considerably, and other forms more or less.
The value of the products of our country during the past year is
estimated at seventeen thousand million dollars (seventeen
billion dollars), which is handled three or more times
before consumption ; taking three times, which is a low average,
requires fifty-one thousand million dollars (fifty-one billion dollars)
in credits and money, to make the exchanges. With all this comes
payments of debts, interest, travelling and hotel expenses, cash
trade, small money to change larger money, payments to employ¬
ees, very many other payments, besides cash required to be kept by
individuals for current expenses. Can the human mind conceive
the vast credits and money requisite for the successful movement of
the immense undertakings of the progressive and wonderful people
of this expansive country.
They cannot, they are groping in the dark, otherwise they would
use every effort to clieck the financial storm which is now bringing
consternation in every branch of business. .lust imagine the
great wrong and damage that has been done during the year ending
August 1st 1896 by the taking of about one si.vteenth of the circula¬
tion from the channels of trade. Here is the report issued from the
Treasury Dejrartment showing the amount of money in circulation
at respective dates :
August 1st 1895 .^1,614..133,786
August Ist 1896 $1,514,903,142
Total withdrawn $ 99,630,644
Yet with the prices of nearly »very article of produce below cost
of production there are intelligent men from intense adhesion to
party, declaring the cause to be from low tariflf and overproduction.
The sole cause is tbe contracted money circulation. Money is the
power that makes and unmakes nations, just as it is increased or
decreased ; governments make and unmake money, just as it made
the trade dollar by law, and unmade it by law, forcing it thereafter
to be sold as bullion to the people for the profit of the bullion
dealers wbo gained largely by the scbeme.
Had President Buchanan been a thorough business man (such as
Dr. Franklin, who knew the power of money) capable of penetrating
into the wretched condition of the people,he would have recommend¬
ed Congress to issue and place iii circulation an ample volume of
full legal tender treasury notes to fill the vacuum caused by the ex¬
ported coin and worthless banks notes, which would have aflforded
immediate relief. The government had temporary relief in the
17
issue of the $20,000,000,000 treasury notes, why could not an abun¬
dant relief have been afforded the people in the issue of one hundred
million dollars in treasury notes ? But unfortunately for the people.
President Buchanan had devoted his early business life in study¬
ing the technicalities in law, and afterwards as a plodding politician,
too timid and vacillating to act in a great emergency. Had he been
the equal of Franklin, our country would have been restored to
prosperity, the people made happy and that most unfortunate war
of the rebellion been averted.
The intense poverty of the great masses by the destructive
panic made many of them vicious and reckless and caused some
to care not what they said or did, even if it brought civil strife,
taking chances of its being the means to give relief. Some persons
have ascribed the war of rebellion as in part having been brought
on by this poverty. The rebellion came and our government was
without means to prosecute the war. An army of men were ready
to bear arms—but the government had no money—Congress there¬
fore was forced to and did use its power to make money. The first
issue was $60,000,000 in demand notes, which were receivable for
custom duties and remained at par with gold until retired from cir¬
culation, which the bankers succeeded in accomplishing. The
next issue was United States notes, commonly called greenbacks,
issued in February 1862 to the extent of $150,000,000 ; they were
made a legal tender to pay all debts, except custom duties and in¬
terest on the public debt. This exception clause was a most
grievous mistake, as it in time occasioned immense losses to the
people through depreciation under its par value. The discount on
the greenback dollar was solely caused by the exception clause
from payment of custom duties, which forced the merchants who
had custom duties to pay, to sell their greenbacks for gold, which
was scarce and controlled and owned by the gold brokers. If the
merchants could have paid cusiom duties with greenbacks, their
debt paying power would have been ample to have maintained
them at par with gold, as with the notes of the bank of France, which
were a full legal tender during the war in 1871 between France and
Germany; notwitlistanding the bank had suspended specie pay¬
ment, their debt paying power was ample and kept them at par
with gold.
French Indemnity to Germany.
In July 1871 the indemnity from France to Germany was fixed at
$1,060,209,015,00 ; after crediting France with the value of certain
railroads in Alsace and Lorraine, the amount of indemnity due
Germany became $999,172,069, or 4,990,860,349 francs, which was
paid in November 1871, by the bank of France, a portion of which
was in its notes at par. The indemnity was settled as follows :
IN PAPER.
In Bank Notes of the Bank of France 125,000,000 francs
In German Bank Notes 105,039,045 "
Total paper 230,039,045 "
IN SILVER.
In French 5 franc pieces 239,291,875 francs
In Bills of Fxchange drawn in silver thalers. .2,485,513,729 "
18
In Bills drawn on Hamburg in marc banco 265,216,990 francs
In Bills drawn on Frankfort in silver florins 235,128,152 "
In Bills drawn on Amsterdam in silver florins... .250,540,821 "
In Bills drawn on Antwerp and Brussels 295,704,546 "
Total silver 3,771,395,913 "
IN GOLD.
In French, gold coins 283,003,250 "
In Bills drawn on Berlin 79,072,309 "
In pounds sterling on London 637,349,932 "
Total gold 989,425,391 "
75.6 per cent in silver, 19.8 per cent in gold, and 4.6 per cent in
paper.
In the course of the prosecution of the war vast sums of legal
tenders were issued, a portion of which bore interest and the
other part being United States notes, commonly called greenbacks,
did not bear interest and although depreciated in value below par
with gold coin, caused solely by the exception clause preventing
this money from paying custom duties, it performed its debt paying
power sufficiently well to enable our government to crush out
that gigantic rebellion. This money also enabled the business
men to carry on the immensely yast internal trade of the country
successfully, and most successfully for several years after the close
of the war, with but few failures among them, until those legal
tenders were largely reduced in volume, through funding into
long term interest bearing bonds, when the failures of the business
men, idleness and hard times increased in the fame ratio with the
cancellation of the legal tenders.
At the close of the war there was a generous supply of money in
the channels of trade throughout the north which had a population
of about 25,000,000. The millions of soldiers discharged from the
army were through this liberal supply of money enabled to find im¬
mediate employment at renumerative wages. The north at this
period was likened to a great bee hive full of active workers with
an abundance of cash to work with. Thus prosperity revived
throughout that portion of the country. The N. Y. Herald was
out every few days with an editorial urging the people to sub¬
scribe sufficient money to pay off at once the National debt. The
south with a population of about 10,000,000 was in a most de¬
plorable condition through the ravages of war, also from decay for
the want of money to keep things in repair, and much misery
existed in that portion of our beloved land. The currency was con¬
federate notes, which were almost worthless from the first issue
because they were issued by an unstable government in rebellion,
were poorly engraved and largely counterfeited, and so well exe¬
cuted that the bad note could not be told from the genuine. They
were not made a legal tender to pay debts, therefore had no forced
debt paying power, but were made redeemable in coin after the suc¬
cess of the confederacy, in which many of the pecóle had no confi¬
dence ; all combined caused this paper currency to be a failure from
the start.
On October 31, 1865, the report of the secretary of the treasury.
19
as published in Appleton's Gazette, showed the money of the
country was $1,782,254,939. The money was of the following;
U. S. notes (greenbacks) $431,066,427
Fractional currency 25,033,828
Legal tenders, 7-30 829,992,500
Certificates 130,051,721
" " Demand notes 472,603
National bank notes 146,137,860
btate bank notes 69,500,000
Gold and sil ver 150,000,000
$1,782,254,939
Say about $70 per capita for the 25,000,000 people of the north
or $50 per capita for the people of the entire country.
A large portion of the Treasury notes, though legal tender, bore
interest. These the banks held mostly for their reserves, which en¬
abled the keeping in active circulation all the United States notes and
national banks notes; also insurance companies, which keep large
cash money assets, retain these interest bearing legal tenders.
Thus the business of our retail merchants was done largely with
cash, and great safety. This bounteous supply of money was acting
like a charm, and according to Bradstreet's reports, the business
failures of our country were comparatively few, as follows :
1864 520
1865 . . . 531
1866 . . 632
Total . 1683
This generous supply of money, amounting to over $50 per capita,
rating the entire population of our country at 35,000,000, was in the
handsofonly the 25,000,000 people of the North. The 10,001,000
people of the South were almost without money. Their confederate
currency had gone out of existence. They, however, were in va¬
rious ways begining to acquire some of this money, and it was enabl¬
ing them to patch up the wrecks of that terrible, desolating war, and
was making them more contented with their sad condition.
But the money power of this country and of Europe in their great
greed for gain, would not let well enough alone. In lieu of consent¬
ing to a gradual increase in the money supply demanded for the use
and progress of the people, and especially to aid our brothers of the
South to build up their section, they insisted that all the paper mon¬
ey of the United States was a debt and should be funded into long¬
date bonds bearing interest, which would permit their hypotheca¬
tion to the government as security for the payment of national
bank notes ; these the banks could loan to the people and thus en¬
able them to secure double interest—yes, interest from the govern¬
ment on the bonds hypothecated for bank notes, also interest on the
bank notes which they loaned to the people— a case of double
interest and extreme selfishness.
Democratic Leader.
In July, 1865, Mr. August Belmont, fiscal agent of Messrs. Roth-
20
Schild, was, at tue instigation of Senator Thomas F. Bayard, elec¬
ted Chairman of the Democratic national executive committee,
and at his dictation kept there until 1876—eleven long years—
against the protest of the rank and file of the Democratic Party.
But Mr. Belmont was a liberal subscriber to the Presidential cam¬
paign fund, which covered a multitude of sins.
Senator T. F. Bayard had served as a clerk for eight years under
Mr. August Belmont—therefore one good turn deserved another
even had the people to suffer in consequence.
Through the action of Senators Sherman and Bayard, aided by
Mr. Belmont,a3 his position of Chairman of the Democratic nation¬
al executive committee gave him great influence, Congress enact¬
ed laws to fund the legal tenders into interest-bearing bonds.
Thus was to be taken away very largely of the debt-paying power
from the people which was enabling them to so successfully run
their industries.
To facilitate this matter the Secretary of the Treasury appointed
a syndicate, who were paid a very liberal commission, composed
of August Belmont, Jesse Seligman, Jay Cook, Dkexel & Co.,
First National Bank of New York.
August Belmont, the head and front of this syndicate, was a
prominent banker and bullion broker of New York city,Chairman
of the Democratic national executive committee and one of the
heaviest contributors to the Democratic campaign fund. Also,
fiscal agent of the Rothschilds, the leading bankers and heaviest
dealers in gold, silver and copper in the world.
Jesse Seligman was a prominent banker and broker of New
York city, a leading Republican and heavy contributor to the cam¬
paign fund; also fiscal agent of Seligman Bros., prominent
bankers and bullion dealers of Paris. Mr. Seligman was in 1892
sent by President Harrison to Europe to investigate and report
upon the prospect of international bimetalism. His report was
against the measure as not feasible and not desirable. Self-interest
was too strong to do otherwise. Therefore the people have had to
continue to suffer in consequence of his judgment against free
coinage.
Dhexel & Co. were leading stock, bullion and exchange brokers
of Philadelphia.
Jay Cook was a private banker of Washington city, who was
prominent in effecting large loans for the government during the
war of the rebellion. He was the fir.-<t very prominent person
that failed at the breaking out of the panic of 1873, caused by the
heavy contraction of the money circulation, in which work he was
one of the principal parties. His failure was said to be for
$7,000,000, and his property was turned over to a receiver, who not
being able to dispose of it, owing to the great scarcity of money,
held it until the panic ceased, when after settling all debts, the
receiver turned over in 1881 to .lay Cook property of the value of
$9,000,000. Mr. Cook is now living in his palatial castle, "Ongontz,"
near Philadelphia and, it has been reported, now sees the folly
and wreckage of that contraction policy ; also, that he is an
earnest advocate of the free coinage of silver at 16 to 1, without
awaiting the action of any European government.
First National Bank of New York, one of the leading banks
21
of that city, gained great notoriety from the enormous sums of
government money deposited in it by John Sherman, secretary of
the treasury, which enabled that bank to loan vast sums and pay
very large dividends to the stockholders.
The syndicate accomplished their work expeditiously arid
thoroughly and in a short time the national banks were deprived
of all their interest bearing legal tenders, which they had been
holding that enabled them to keep out and in active circulation
the greenback. Thereafter the banks were required to take in
and hold the greenbacks for their legal reserves. Also Trust and
Insurance companies were forced to part with their interest bear¬
ing legal tenders and afterwards hold greenbacks for urgency
money. Which funding measure contracted the legal money
enormously.
This funding scheme and syndicate business was a wonderful
piece of financial jobbery, all in the interest of the money power
of this country and Europe. They were for awhile enabled to buy
$2.85 in greenbacks with $1 in gold, then have them funded into
6 per cent bonds, and thus receive about 17 per cent interest on
the gold dollar invested. They could then secure a national
bank charter and hypothecate their bonds with the government
and receive 90 per cent in national bank notes, which thev loaned
to the people at 7 to 10 per cent interest, giving them fully 25 per
cent interest on their original investment, one of the worst money
making arrangements ever perpetrated upon a free people.
The work of contracting the money circulation went on with
great expedition ; also, the exportation of gold and silver con¬
tinued enormously large. Our country had been nearly drained
of its metalic money, which had been kept up with but very little
intermission since 1851. From 1851 to 1873 inclusive, the ex¬
ports of gold and silver from our country amounted to the im¬
mensely vast sum of $1,073,434,983 net. (See mint report of 1895
p, 294 and 295).
With this immense loss of money from the channels of trade
bankruptcies increased, property continued to decline in value,
the demand for labor grew less and wages lowered rapidly. The
European money kings through paid attorneys in and out of Con¬
gress, not content with the wreckage they had caused and were
still causing, most deliberately in this hour of contraction, when
depreciated national bank notes and greenbacks only remained
in circulation, went to work without warning to the people and
secretly succeeded in having Congress on the 12th of February 1873
drop the standard silver dollar of 412)^ grains from the coinage
law then adopted and substitute in its place the bastard trade
dollar of 420 grains, which was only a legal tender in sums of five
dollars, and declared to he solely for the Asiatic trade. If such
was the case, why was it given any legal value? No, there was a
blind and a fraud.
Their object was to take away the unlimited demand for silver
bullion for coinage at the mint at about $1.29 per ounce, where it
had been coined for eighty-one years, and thus force the price of
silver bullion down toa low figure, which would enable them to
make big profits through its exportations to Asiatic countries
where free coinage existed. These bullion dealers have got the
22
price down to about 67 cents per ounce, its present commercial
value, and are now making immense profits. This action against
silver was another wonderful piece of financial jobbery in the in¬
terest of the money kings of Europe. This action on the part of
Congress was the most astounding, unaccountable, unfortunate
and disastrous to the people ever perpetrated and should have
been undone immediately, after it was discovered.
It was reported when the deed was discovered, that it was
accomplished through the work of Senators Thomas F. Bayard
and John Sherman, Repre.sentative Thomas Hooper, and August
Bélmont, chairman of the Democratic national executive com¬
mittee, and fiscal agent of Rothschilds, heaviest operators in
silver bullion of the world and at this time the monopolists of
silver bullion ; who not having any competitor able to cope with
them, have regulated its price as a commodity and make most
enormous profits through its wrongful depreciation in value,
caused solely by the unlimited demand having been taken from
it for coinage at our mints at about $1.29 per ounce. Should
Congress restore the unlimited coinage of silver bullion at about
1'6 to 1, then it would at once appreciate from its commercial
value of about 67 cents per ounce to its coinage value of about
$1,.29 per ounce and remain permanently at a parity with gold
bullion, say about $20.67 per ounce for gold bullion and about
$i.29 per ounce for silver bullion, thus making the parity of 16
ounces of pure silver bullion to one ounce of pure gold bullion.
Gold bullion now settles balances due Europeans at its coinage
value of $20.67 per ounce as fixed by the laws of the United States.
If Congress would restore the unlimited coinage of silver bullion
at about $1.29 per ounce, it would thereafter enable the settling of
the enormously large balance in trade against our country for teas,
silks, spices, coflFee, rice, etc., and labor to Asiatics, and save a
very large export of gold. An associated press dispatch, dated at
Berlin, July 28, 1896, published that Li Hung Chang, Viceroy
of China, stated that on his return home be woidd at once start
actively to work coining silver bullion for the more than 400,090,-
000 Chinese. Neither European nor Asiatic countries produce
silver bullion of any consequence, therefore they have to buy it
from the countries of the western hemisphere and Australia,
which produce the great bulk. They should be made to pay its
coinage value. Then the bullion dealer would cease to make the
immense profit between the commercial and coinage values. Free
coinage at 16 to 1 by the United States would settle it.
Third Panic.
Finally the tornado contraction caused by the enormous funding
into bonds of the interest bearing legal tenders, the large reduction
in the volume of the greenbacks, and the vast exportation of gold
and silver, burst forth with all its fury throughout the country.
From July 1st, 1862, to July 1st, 1873, $695,397,224 net of gold
and silver was exported (see report Mint Director 1895, pages 294
and 295). The first heavy failure was that of Jay Cook, one of the
funding syndicate for $7,000,000, followed shortly by the suspension
23
to pay depositors by every national bank, except the
Chemical National Bank, and a few others in other
sections. Also by pretty much all the State and private banks.
Fortunately for the banks as well as the people, the banks were on
a greenback basis, in lieu of a specie basis. Therefore they were
enabled with but few exceptions, to resume payment to depositors
in about seven weeks. Also the National bank notes, which are
not a legal tender to pay debts, were redeemed in Greenbacks,^ in
lieu of coin, which saved our people from a terrible affliction.
Had the banks been on a specie basis as they were in 1837 and
1857, in lieu of a greenback basis, the panic would have been
frightfully more severe and the banks could not have recovered for
many years. How providential for the people that they were then
afforded the use of greenbacks issued by our government. The
greenback saved our nation from destruction by the war and saved
the banks from destruction from the panic. United States notes
made a full legal tender, and backed up by the wealth of the na¬
tion are far superior to all bank notes backed up by specie or other¬
wise. When the specie is exported the banks burst and their notes
become worthless, and the depositors and note-holders pocket the
enormous losses.
Yet in view of all this terrible experience, nearly every Banker's
Association that has been held of late years, have mostly urged
that the United States and Treasury notes be funded into interest
bearing bonds and the substitution therefor of bank notes, to be
based on gold coin. Still the bankers know that our people are in
debt to Europeans about $3,000,000,000, with an interest charge of
about $150,000,000 annually, which interest therefore, when the
times were good, was mostly reinvested in chis country in every spe¬
cies of property ; but since the pressure set in about 1888, they have
been calling for their interest, and will continue to call for it so long
as investments prove unprofitable. From July 1st, 1888, to August
1st, 1896, $332,887,320- net of gold has been exported from our
country.
After the failure of Jay Cook in 1873 bankruptcies increased to
a fearful extent, salaries and wages went down very low, idleness
poverty and crime increased rapidly, and real estate decreased
heavily in value. Thus our country was again placed in a terribly
sad plight, all owing to its most worthless financial system.
This wretched condition of affairs continued on the down grade
from bad to worse until the fall of 1878, in the same ratio with
the rapid decrease in the volume of money from the channels of
trade, say from about $50 per capita in 1865 to about $15 in the
spring of 1878.
A large decrease of the money volume always destroys confi¬
dence, brings on heavy increase in bankruptcies, wreckage of the
banks, idleness, reduction in salaries and wages and a financial
panic of several years duration. As a proof of this assertion look
back at the several frightful panics that have occurred in our coun¬
try during the past sixty years.
Here is a statement in regard to the decrease in the volume of
money, taken from the Inter Ocean in 1878, a leading republican
newspaper of Chicago :
24
Year.
Currency. |
Population.
Per Capita.
1865 ....
$1,651,282,273
34,819,581
$47.42
1866 ....
1,803,702,726
35,537,148
50.76
1867 ....
1,330,414,677
36,269,502
36.68
1868 ....
817,199,773
37,026,949
22.08
1869 ....
750,025,989
37,779,800
19.85
1870 ....
740,039,179
38,588,371
19.19
1871 ....
734,244,774
39,750,003
18.47
1872 ....
736,340,912
40,978,606
17.97
1873 ....
733,291,740
42,245,110
'17.48
1874 ....
779,031,589
43,550,756
17.89
1875 ....
778,186,250
44,896,705
17.33
1876 ....
735,358,832
46,284,344
15.89
Í877 . ; . .
696,443,394
47,714,829
14.60
Also, the failures increased with the decrease in the volume of
money. Bradstreet's reported the failures during this depression,
to-wit :
1873 5.184
1874 5,830
1875 7,740
1876 9,092
1877 8,872
1878 10,478
Total 47,195
In 1877 about 3,000,000 people were estimated to be out of
employment, and competing with the employed for work, tiius
causing a reduction in wages, and caused great poverty, misery,
and crime to prevail all over our land.
Here are a few instances showing the heavy decline in value
of real estate that prevailed almost everywhere througliout our
country. The Baltimore American published the following:
" Kemarkable Decline in Value.—The three story brick building
on the west side of Calhoun, near Prestman street, sold by
Messrs. F. W. Bennett & Co. on Thursday for $400, has a history
that strikingly illustrates the decline in real estate. Several years
ago it sold for $3500 ; then it was sold by Kirkland under a mort¬
gage foreclosure for $2100. About twelve months later it was sold
again by Bennett for $900 ; and now it is sold for $400. It is
assessed at $2300." The writer of this pamphlet while residing in
Baltimore witnessed the following sales : The immense brick
block belonging to the Calvert S. R. Co., which cost $1,275,000,
was sold for $75,000. In October, 1877, the substantial five-story
brick block covering about ten lots, which cost Woods, Weeks &
Co. $750,000, was sold for $52,600.
Money was scarce, and as a consequence property, employment
and wages were at a low ebb. Yet the bankers told the people
then that there was an abundance of money. They are still
repeating the old story. It never gets stale.
The writer was an elector for the State of Maryland on the Peter
25
Cooper ticket and stumped the state for financial reform, pleading
for a cessation of the contraction policy that was then withering
all our industries and forcing intense idleness among the people.
He advocated the restoration of the free coinage of silver at 16to 1.
also a large issue of greenbacks by our government as_ the only re¬
medy to restore confidence and bring back prosperity. At Ha-
gerstowu in October of that year, while addressing the people, he
called Senator Hamilton and Kepresentative Roberts, who were
present,to account for having voted to demonetize silveron Feb. 12,
1873, also having voted for the bill which took the legal value from
the trade dollar in July 1876, thus taking away its debt paying
power and forcing it thereafter to be sold as bullion. Both denied
any knowledge of the facts, but I showed them the congressional
records proving the passage by Congress of both acts. I told them
that in so voting they had been derelict in their duty to the people.
The people could not be awakened from their lethargy. They
did not realize that the contracted money circulation was the main
cause of all their ills, but insisted upon discussing tariff all the
while. Politicians would discuss that issue and no other.
The panic went on and the people suffered from its torments.
In March 1877 Hayes and Wheeler were respectively inaugura-
President and Vice-I^esident. Our country was then still poaning
under the disastrous financial panic that broke out in IS/S.
Bankruptcy had increased alarmingly, about 3,000,000 willing
workers were idle and many of them were roamingover the country
in search of employment, without avail. Poverty, misery, and
crime had largely increased. In 1878 a bill for the free coinage of
silver, introduced by Representative Bland passed the house and
senate, but was vetoed by President Hayes. Then Senators Al¬
lison and Bayard and John Sherman, Secretary of the Treasury,
got together and concocted a bastard coinage bill, requiring the
monthly purchase of «not less than $2,000,000, nor more than $4,-
000,000 of silver bullion, which bill was enacted into a law on
March 1878.
Here was another occasion seldom offered to help the great mass¬
es of the people out of their long suffering. But a great man, then
so sorely needed, was not at the helm of our government. Presi¬
dent Hayes, doubtless honest, had not the ability, good business
qualities, nor sound judgment then required to navigate the ship
of state through the financial storm. His forte was sarcasm and
ridicule. The silver dollars coined under the above law, and a
heavy importation of gold, to pay for breadstuffs exported to Eu¬
rope, where the people were suffering from a famine, owing to
short crops, brought our country out of the panic. In addition to the
free coinage of silver, which would have been an immense benefit
to the people, a larger paper money circulation was greatly needed
and was being discussed throughout the country.
The Greenback.
In the fall of 1878 President Hayes made a tour of the west, and
delivered several speech on the greenback.
In a speech delivered at Madison,Wis.,on 10 Sept. 1878, President
26
Hayes, in speaking of the United States notes (greenbacks), said:
"The champions of this currency tell us what they ought to have
is a species of paper currency which by act of congress should say
one dollar upon it, and be worth one dollar in this country. Ot
course we do not want it counterfeit, they say, but I am afraid it
would not be a great while after it was issued before it would not
be of sufficient value to counterfeit. They would have the dollar
printed on good paper, a good looking picture, showing good en¬
graving. What does such a dollar cost ?
"They say they want good currency. With us that means a coin
dollar. We know what such a dollar costs ; that it represents a
day's work, or a bushel of wheat. Does a paper dollar represent
any such amount of labor? No. The cost of its production is less
than one cent for each dollar bill. Herein we certainly have a
great saving—a saving of 99 cents in labor over the silver or gold
dollar that costs a bushel of wheat or a day's labor, as we haye
seen. Now as it costs no more to print the word two than the
word one, let us improve the opportunity. Make the bill read
'two dollars,' and we shall save 198 cents. Now, my friends, if
we were to undertake to make two dollars out of gold, it would
cost two day's labor or two bushels of wheat. An advantage,
then, appears to he on the side of cheap currency ; and let us
improve the opportunity offered us and make our bill read ten
dollars, instead of a two or a one, as the cost is only one cent.
Instead of ten day's labor or ten bushels of wheat, multiples of
ten, with no more cost than for the single dollar. We are doing
well, but not wisely, I fear, for we might not choose well ; and now
we will pay off the national debt with it; and then, Mr. Senator
and Mr. Congressman, we will pay you off in the same; and I fear
they might turn upon me and say ; ' Well, Mr. President, we will
pay you off in the same kind of money.' "
What a ridiculous speech of pure unadulterated pettifogging !
Senators, representatives and soldiers of the army were paid in this
money, and it carried our country successiully through the re¬
bellion. Chief Justice Waite in rendering that memorable de¬
cision of the Supreme court of the United States declared that our
government might find it necessary to issue its legal tenders in
time of peace. That occasion was then upon the country, but Presi¬
dent Hayes was not the man for the occasion.
The Baltimore Riot.
On July 15, 1877, at Baltimore, in the Cross street market hall,
the writer, by invitation of the employees of the Baltimore & Ohio
Bailroad Co., addressed them upon the subject of a contemplated
strike upon the reduction of their wages. He told them that the
country was then in the midst of an alarming, grievous and most
distressing financial panic, brought on by a greatly contracted
money circulation, that several million willing workers were idle
and looking for a job at any price and competing with those who
had work. That many of them had families dependent upon
them ; therefore they should remain at their posts, as half a loaf
was better than no bread ; that owing to the depression business had
fallen off largely in every branch ; that the B. & O. K. R. Co. was
27
not making money as formerly and had to retrench ; that their re¬
medy lay in thereafter electini! honest and capable business men
to the halls of congress to enact just and liberal laws, especially
one for a generous financial system that would restore prosperity.
A young man arose and asked how much the B. & O. Co. had
paid him to thus talk to them. The writer replied that he was
there at the request oí a committee from their organization, who
came with a carriage to hie residence and invited _ him to come
and address them. He had given them his candid and honest
judgment. He then told the young man that he would be one of
those who would abandon his place and that he would for a long
time be walking the streets of Baltimore, wearing out shoe leather
looking for another job,—which proved to be a fact. Vice-presi¬
dent Kiser appeared at the hall to talk to the men, but many de¬
clared he should not be heard ; but upon my urging them to
listen to him, they submitted. He then came forward and told
them the company was losing money and that in justice the
employees should submit to the reduction, which would be re¬
stored when times improved, A majority decided not to strike.
The next day some of the hot heads abandoned their places ;
a riot ensued, with incendiary fires; the rioting spread into
Pennsylvania, where in Allegheny county millions of dollars of
property was destroyed.
Here is a warning to those eminent financiers who still insist
upon a contracted money circulation and urge that the immensely
vast internal trade of our country should continue to be run on
a 98 per cent credit basis, which plan is rapidly destroying
qonfidence, with all its dire results. Heed and change ere it is
too late !
To Retire Greenbacks.
Here are a couple of Associated Press despatches ;
senate.
Washington, December 3 1879. Mr. Beck introduced a bill to
authorize the payment of customs duties in legal tender notes;
also a bill to amend title 48 of the revised statutes, so as to author
ize the purchase of foreign built ships by the citizens of the United
States for use in the foreign carrying trade ; referred.
Mr. Bayard introduced a joint resolution that from and after the
passage of this resolution, treasury notes of the United States shall
be receivable for all dues to the United States excepting duties on
imports, and shall not be otherwise legal tender, and any of said
notes hereafter re-is^ued shall bear this superscription; referred.
retirement of greenbacks.
Washington, December 2, 1879. The radical recommendation
by President Hayes and Secretary Sherman for the retirement of
greenbacks is the chief topic of comment to-day in political circles.
Again are found Attorneys Bayard and Sherman at their old
tricks working in the interest of the "Money Kings of Europe".
Tbe same power is still at work. Will the people continue blind
to their own interests ?
President Hayes, in his message of December 1880, urged the
28
retiring of greenbacks from circulation, stating, "There are still
in existence, uncancelled, $346,681,016 in United States legal
tender notes. These notes were authorized as a war measure,
made necessary by the exigencies of the conflict in which the
United States was then engaged. The preservation of the nation's
existence required, in the judgment of congress, the issue of a legal
tender paper money. That it served well the pmpose for which it
was created is not questioned, but the employment of notes as
paper money indefinitely after accomplishment of the object for
which they were provided was not contemplated by the framers of
the law under which they were issued. These notes long since
became, like any other pecuniary obligation of the government,
a debt to be paid, and when paid to be cancelled as mere evidence
of indebtedness no longer existing. I therefore repeat what was
said in my annual message of last year,that retirement from circu¬
lation of United States notes with the capacity of legal tender in
private contracts, is a step to be taken in our progress towards safe
and stable currency, which should be accepted as the policy and
duty of government and interest and security of the people."
Further on he urged the repeal of the restricted coinage law of
1878. He said : "During the last year the average market value of
the silver dollar has been 88j>^ cents. It is obvious that the legislation
of the last congress, in regard to silver, so far as it was based on an
anticipated rise in the value of silver as the result of that legis¬
lation, has failed to produce the efiect then predicted. The longer
the law remains in force, requiring, as it does, the coinage of a
nominal dollar, which, in reality, is not a dollar, the greater be¬
comes the danger that this country will be forced to accept the
single metal as the sole legal standard value in circulation, and
this a standard of less value than .it purports to be worth in the
recognized money of the world." The banks of our country then
as now, with the very limited amount of gold in our country, were
in no condition to be placed upon a gold basis.
Providentially, congress did not heed the advice of President
Hayes, the greenbacks were continued in circulation and the coin¬
age of silver went on. Both helped tobring the country out of the
toils of the panic, also providentially, our country, in 1878, and for
several years after, produced magnificent crops of grain, while the
grain crops of Europe were a partial failure, which necessitated
heavy exportations of our produce, and in payment Europe sent
sent us large sums of gold. The coinage of silver and the impor¬
tation of ^old, with the aid of the greenbacks, brought the country
back to fair prosperity.
In 1881 Garfield and Arthur were respectively inaugurated
president and vice-president. They went into office under ad¬
vantageous circumstances brought about by improving times, from
the increase in the volume of money, by the importation of gold
and by the coinage of silver dollars under the law of 1878. Still
the money circulation was far from ample to give an abundant
prosperity. Yet it had sufficiently increased to bring on a wave
of fairly good times and give employment to _ most all of the
3,000,000 persons who were idle during the panic. The coinage
of over $2,000,000 worth of silver bullion monthly had added con-
29
eiderable to the circulation and aided in backing up the credits,
thereby increasing confidence among the business people.
President Garfield had been in oflSco but a short time when he
was assassinated. Then Vice-president Arthur was sworn in as
president. Matters continued through the term of President
Arthur in an improving condition and when he left office there
was about $100,000,000 surplus in the treasury.
Import of Gold.
Fortuitous circumstances had brought an era of prosperity
again to our people. Most bountiful grain crops were produced in
our country in 1878, and for several years after, while there was
a partial failure in the grain crops of most countries of Europe.
This had the effect to increase enormously our exports to Euro¬
pean countries. From 1878 to 1885, inclusive, our net exports
reached nearly $1,200,000,000, which had the effect to send back
to our country a vast amount of our securities; also, over
$187,000,000 net in gold was imported. (See Statistical Abstract
13, pages 60 and 62).
Coinage of Silver Dollars.
Also, Congress in March, 1878, passed the restricted coinage
law—to purchase and to coin into dollars not less than $2,000,000
nor more than $4,000,000 in value of silver bullion monthly—but
the Secretary of the Treasury took very particular pains to always
purchase the lesser amount. Up to and including 1885 the coinage
of silver dollars was about $218,000,000. (See Mint Report, 1888,
page 203). Thus the immense sum of about $400,000,000 was
added to our money circulation through the importation of gold
and the coinage of silver dollars. With more money business
improved in every branch, employment of labor became more
active, real estate enhanced in value, and generally the times
greatly improved.
Decrease of Failures.
R. G. Dun & Co. reported failures much reduced in numbers
from former years, as follows :
1880 4,735
1881 5,582
1882 6,738
Total 17,055
In November 1884 Grover Cleveland and W. H. Hendricks
were respectively elected president and vice president. Grover
Cleveland just after his election as president and before being
installed into office, took into his confidence Thomas F. Bayard.
They concocted that notorious anti-silver letter written in February
1885, which he addressed to General A. J. Warner, then chairman
of the Coinage Committee of the House, requesting that Congress
take no further action in regard to the coinage of silver until he
should be inaugurated ; that if Congress did, it would be the ruin¬
ation of the country. Congress was then considering and just
about passing a bill for the free coinage of silver at 16 to 1. This
30
wholly unwarranted and unjustifiable letter depreciating silver
coinage, written by Cleveland and sent to Congress before being
installed into office, was the death blow to silver coinage for that
term, from which it has not yet recovered. It was just what the
European bullion dealers intensely desired and what they had
been battling for since 1873, knowing it would cause the bullion to
largely depreciate in value and enable them to make enormous
profits. When Cleveland wrote that letter he knew nothing about
silver. It was new to him. The statements he made were the
paid opinions of the paid attorneys of the bullion
dealers whispered into his ear. Anyhow it had
its effect to prevent silver coinage, and as silver
bullion went down in price, wheat and cotton likewise followed,
and farmers, merchants, manufacturers and mine owners have in
consequence lost several thousand million dollars, causing the
wreckage of men in every branch of business, and for all of which
President Cleveland is responsible and censurable. He has ever-
since his first election fought silver early and late and most unre¬
lentingly. Who has been benefitted by his intermeddling before
being legally authorized to act? Not our people, for they have lost
immensely. Foreign governments and the "Money Kings of Eu¬
rope" only, have profited by the hasty intermedling and usurpation
of Grover Cleveland.
Cleveland Inaugurated.
On 4 March 1885, Grover Cleveland was inaugurated president.
He went into oflBce on the highest tide of the good times brought
about through the large coinage of silver dollars and the heavy
importation of gold.
Illegal Deposits.
President Cleveland found in the treasury a surplus of over
$100,000,000, from which he unwisely loaned without interest $61,-
000,000 to national banks, which Mr. Blaine said, in a public
speech at Auburn, Maine, was without authority of law. This loan
had a very serious and bad effect upon the country. It enabled
the banks to get a corner on the 4 per cent bonds falling due in
1907 and raise the premium on them to the outrageous price of 28
per cent, which they preferred to take from the government rather
than to keep their bank notes in circulation. Through this action
the national banks retired their circulation rapidly and largely,
which was ground up into pulp in that mill in the treasury depart¬
ment known as "Old Desolation." I suppose it is so called from
the desolation caused by tbe immense amount of money that had
been ground up in it. If it could talk it could tell many a harrow¬
ing story that this wanton destruction of money has caused. This
paper pulp is cast into paper weights, etc., and sold to visitors,
from stands in tbe halls of the several departments.
Senates* Plumb in a speech in the senate in 1888, referring to the
deposits in the banks, said : "The treasury department is in active
partnership with the national banks. The secretary of the treas¬
ury has loaned to the banks over $61,000,000 of the public funds
instead of buying bonds and saving interest. It has chosen to do
31
this, and up to date the banks have been willing to receive the
money."
Senator Sherman in commenting upon such deposits said :
" It is also true that during President Cleveland's adminstration,
at a time when there was a real or supposed stringency, the then
secretary of the treasury deposited in national banks a large
amount of public money, other than that derived from customs,
with a view to relieve the stringency. I believed and proclaimed
at the time that this was neither authorized by law nor was it good
policy. The money should have been promptly used in the pur¬
chase or payment of the public debt. No such deposit was made
by a republican administration, and the money so deposited was
withdrawn as rapidly as was prudent." Afterwards Mr. Sherman's
speech was criticised, which appeared in the View, published in
Washington: "But Senator Sherman says that 'no such deposit
was made by a republican administration.' I once heard a little
boy say to his father, who had failed to bring him a promised toy,
' Pa, you've got a mighty big forgetity.' It is evident that John
Sherman owns about the largest and most convenient 'forgetity'
in this country, if he has forgotten the fact that while he was sec¬
retary of the treasury, 1877 to 1881, he used the First National
Bank of New York as a depository of public funds, and that be
kept on deposit in that bank from $100,000,000 to $125,000,000 on
which the bank did not pay the government a cent of interest,
but on which the bank probably made $5,000,000 a year during the
four years that Sherman had control of the people's monetary in¬
terests. The fact that Mr. Sherman was a stockholder in, anda
director of that bank, still further increases the wonder that he
should have forgotten all the facts in the case."
"John Sherman entered public life in 1854. He was a poor man
then. He has received in salaries a total of $190,000. He has
supported his family in fashionable style. He is now a multi¬
millionaire. If asked how he became so wealthy it is highly pro¬
bable that his elaborate and very convenient "forgetity" would so
completely eclipse his memory as to render him unable to give an
intelligent answer. T. A. Bland."
Washington, D. C. August 22, 1891.
Destruction of Bank Notes.
The report of the Comptroller of the Currency shows the amount
of National bank notes retired from circulation during the first term
of President Cleveland, viz :
1885 $ 17,580,016
1886 13,882,422
1887 29,338,919
1888 32,606,765
$ 93,408,122
Buying Bonds.
He bought enormously of 4 per cent bonds due in 1907 and paid
28 per cent premium. It was this purchase of bonds that caused
the withdrawal and destruction of the vast amount of National
bank notes. The loss of the bank notes from the channels of
trade, taking from the people such an enormous debt paying
32
power, is the origin of-the present panic, wrecking the manufact¬
urers, merchants, farmers and bankers. Can't you see when
money ceases to exist, debt paying stops?
Last year President Cleveland sold through his late law partner,
Stetson, 30'year 4 per cent bonds at per cent premium to the
Rothschild-Morgan syndicate.
For whose benefit was this most astonishing transaction?
Surely not our people. Then who?
The rapid retiring of the immense amount of national hank
notes during President Cleveland's first term were the extra pounds
that broke the camel's back. He was so bitterly opposed to silver
nboney, also to United States notes, that he would not consent that
either should take the place of the retired national bank not^s.
He said that silver was only suitable for subsidiary money, and
that United States notes were unconstitutional money, notwith¬
standing the United States Supreme Court, by eight judges favor¬
ing and only one. Associate Justice Field, dissenting, declared it
constitutional money. The court also declared that our govern¬
ment had the right to issue its legal tenders in time of peace as well
as in time of war. Chief Justice Waite, in rendering that most
wise decision, also said that "there might arise an occasion in
time of peace when our government might find it necessary to
issue its legal tenders."
■ During the first term of President Cleveland such an occasion
arose, but he in his obstinacy let it slip, preferring that the people
might be taught an object lesson of bankruptcy for differing with
him on the question of finance.
The late J udge Beck, then Senator from Kentucky, warned Mr.
Cleveland that his contraction policy would wreck the country, and
urged him to desist; also advised him that as fast as the national
bank notes should be retired an<l gold exported, that he recom¬
mend to congress the coinage of silver dollars, or an issue of United
States notes to take the place of such money withdrawn from the
channels of trade. But President Cleveland heeded not the wis¬
dom of the venerable senator.
While many thousands are suffering from loss of homes under
foreclosure, Mr. Cleveland is serenely enjoying himself around
Buzzard's Bay fishing. He is either indifferent or has not been
posted upon the grave situation of our country ; being surrounded
all the while by heads of trusts and monopolies, and the crafty
politicians, prevents his acquiring information on other subjects
than those which suit them.
Bankruptcy Increases.
According to the report of R. G. Dun & Co. bankruptcies in¬
creased largely in President Cleveland's first term, viz :
1886 9,834
1887 :.. 9,6.34
1888 10,679
Total 30,147
A black record to go out with ! Compare these three years with
those of 1880, 1881 and 1882, or with those of 1864, 1865 and 1866.
33
Export of Gold.
In July 1888 an exportation of gold began which continued right
along and now has assumed immense proportions. The export¬
ation of gold, and the cancellation of national hank notes was an
object lesson in contraction, which the people are feeling most
seriously. The Democratic politicians with the oflBce holders
succeeded in nominating Cleveland for a second term, hut the
people were so dissatisfied with his financial policy that they
voted fpr Benjamin Harrison. They did not hehere they could
fare worse. Harrison was elected and on the 4 March 1889 in¬
augurated president. His was the same unfortunate policy of con¬
traction as his predecessor. He kept in the same groove, buying
bonds, paying 28 per cent premium and allowing the hanks to re¬
tire their circulation without urging upon Congress that it he re¬
placed with other money.
The Comptroller of the Currency's report shows the reduction in
circulation of national hanks as follows :
1889 $ 37,300,733
1890 22,294,131
1891 7,471,285
$ 67,066,149
In 1892 there was an increase of $1,058,248. Still with this deduc¬
tion there was a contraction during the term of President Harrison
of $66,007,901 national bank note circulation through destruction
of the notes. That much debt paying power was taken from the
people. At the same time gold was being largely exported.
President Harrison was an unfortunate selection by the people for
that great administrative office. His early business life was devot¬
ed to technicalities in the law, to aid persons to avoid paying debts
or to escape punishment from charges of infraction of the law.
He has contracted strange ideas about money, and declares that
the gold dollar only is money, owing to its full and intrinsic value.
That our silver dollar is not money, because the intrinsic value
of the bullion is only 53 cents. He declares that it is not, the
law which enables the silver dollar to pay debts, but because
it is based upon gold, yet not one silver dollar, nor a silver certificate,
has ever been redeemed by the U. S. Treasury in gold coin. The
silver dollar has stood alone on its debt paying power, and be for
years has been trying to destroy that debt paying power and force
silver coin into disuse.
The report of the comptroller of currency of 1891, pages 138 and
139, shows that the amount of national bank notes in circulation
was as follows :
October 31,1882 $360,982,713
September 25, 1891 171,978,673
Withdrawn $189,004,040
On the former date there was in the treasury $35,993,461 in
greenbacks for the redemption of retiring national bank notes,
and on the latter date $37,002,875. What a frightful shrinkage—
34
$189,004,040 in the debt-paying power of the people! An object
lesson indeed, felt severely by every business interest in the
country and which forced the New York Clearing-House associa¬
tion on 11 November 1891, to authorize the issue of certificates, to
be accepted in lieu of money in the settlement of clearing-house
balances. The next day $16,645,000 of this illegal currency was
issued.
For the period extending from 1 January 1890, to 31 August
1891, the exports of gold was $75,405,613, net. thus the candle
of contraction was burning at both ends—national bank notes
retired from circulation and gold exported. Thus the business
people were deprived of their debt-paying power. Politicians
were bellowing that the tariff was wrecking the country, and
weak-minded men that there was an over production of mankind's
blessings. It was nothing more nor less than a contracted circula¬
tion of money that was doing the wrecking, and causing a heavy
decrease in the value of all products.
Increase of Bankrupts.
This enormous decrease in the national bank circulation by its
destruction and the heavy export of gold caused an alarming
increase in bankruptcies.— R. G. Dun & Co. reported as follows;
1889 $ 10,882
1890 10,907
1891 12,273
Total
$ 34,062
Compare this large number of failures wdth the years 1880, 1881
and 1882, when only 17,055 were reported or during the three
years of 1864, 1865 and 1866, when the total only numbered 1683.
Then there was a very large per capita circulation. Employees
bad higher wages and were promptly paid. The retail trade of
the country was done on a far larger cash basis than now.
It is the contracted circulation, causing a frightful expansion of
the credit business that is causing the wreckage.
Failure of Foster and McKinley.
It was the contracted money circulation that bankrupted Secre¬
tary of the Treasury Foster and closed his factories in Ohio ; also
that bankrupted William J. McKinley, at present a candidate for
the presidency. Yet those sages are for a further contraction by
the funding of the greenbacks and placing the banks of the coun-
trv on a gold basis, to cause their wreckage again as in 1837 and
1857 !
The assignee of Ex-Secretary Foster settled $213,000 owing the
creditors at 40 cents on the dollar.
Early in 1890 there seemed to be a determination on the part of
congress to restore the unlimited coinage of silver bullion, but the
paid attorneys of the "Money Kings of Europe" smothered the
bill and patched up another compromise. On July 14 Congress
• enacted a law directing the purchase monthly of 4}4 million
ounces of silver bullion, to be paid for in an issue of legal tender
35
treafeury notes, which notes were to he redeemable in coin, and
are the same which Secretary Carlisle has redeemed in gold coin.
That was done to get upa hue and cry to secure the repeal of the
law. On the adoption of the law, silver bullion advanced to $1.21
per ounce, also with it cotton and wheat advanced in price. Many
persons believed that this large coinage would absorb all the sil¬
ver bullion mined in this country. But the Eothschilds were pre¬
pared for the occasion. They had hoarded a lot of silver bullion
in Europe and immediately shipped several million ounces to New
York city, dumped it on the market and broke the price heavily.
Cotton and wheat tumbled in price also. Just as likely as not
those sales of silver bullion were washed and the Rothschilds
bought it back. No one can tell anything about those schemes.
Anyhow the wreckage was complete.
There were about $155,000,000 in treasury notes issued under
this silver purchase law and they did good service in partially
relieving the people from the crisis that had been largely increas¬
ing in force, through the rapid retiring of the national bank notes
and export of gold. The issue of those treasury notes was op¬
portune, but the volume was not near ample to bring prosperity
nor to stop the increasing bankruptcies. The heavy export of
gold kept right along through President Harrison's term and was
an offset to the increase in treasury notes. The people had be¬
come about as sick of Harrison's administration as they had been
of Cleveland's and were ready to jump out of the frying pan of
the one into the hot fire of the other, taking chances for an im¬
provement with Cleveland in another term.
Had President Harrison permitted the passage of a free coinage
silver hill he would have won the hearts of the people and been
re-elected president without a doubt.
The office holders under President Harrison were determined
to hold on to the pap, besides the "Money Kings of Europe" so
deeply interested in the silver question, were satisfied fully with
his record and views, rendered all the necessary aid and his re-
noraination was secured. No other person could have the least
chance.
The politicians and paid wire-workers bent all their efforts for
Cleveland, in whom the Money Kings of Europe from past expe¬
rience had all confidence. Hill had the inside track with the
people, but his Elmira speech was against him and he was set
aside. The nomination was given to Cleveland.
The tariff was forced to the front and made the issue, in lieu
of the vastly more important financial question. Tariff was the
battledore and shuttlecock game that the democratic and republi¬
can parties played and always kept to the front.
A great number of voters in both parties being greatly dis¬
satisfied with the deplorable conditions brought on by the two
administrations, rebelled and nominated Weaver. But they made
a great mistake by bringing in too many issues. Had they
taken up and discussed only the financial question, General
Weaver would have probably been elected president—as it would
have awakened an immense enthusiasm among the people.
But the Money Kings of Europe had determined upon the
36
election of Cleveland, and the well-paid wire workers and politic¬
ians carried out their decree.
Cleveland won and was inaugurated president on 4 March
189.3. He continued to array himself against lilver, United States
notes and treasury notes, determined on their destruction as legal
money and that national bank notes, based upon, and with gold,
be made the sole legal money of the people.
The shipments of gold continued and the hard times increased.
From 1 July 1892 toi July 1893, S87,506,463 net of gold was ex¬
ported ; about $1.25 per capita of the circulation thus sent out of
the country and taken from the debt-paying power of the people.
President Cleveland declared that the growing hard times were
caused by the treasury notes issued in the purchase of silver
bullion—and called a special session of Congress to repeal the law
of 14 July 1890. After a stormy discussion in Congress, Cleveland
through promises and threats, secured its repeal on 1 November
1893. A severe money crisis was on the people at the time of the
discussion of the bill, which aided in the repeal. The world's fair
was in progress at Chicago, several hundred thousand people
were making or preparing to make the trip, many carried money
with them in lieu of exchange, not wishing to be put to the trouble
to be identified at the banks in Chicago. This taking of a vast
amount of money out of the banks throughout the country, when
they were poorly prepared for the heavy withdrawals, owing to
the very contracted money volume, and transfering it to the
pockets of the people, had a yery disastrous efiect and caused
some 567 banks to close their doors and thus derange the business
of the entire country. Some of the banks opened a few months
after, but the greater number became insolvent.
President Cleveland in his message declared that the repeal of
the law authorizing the purchase of silver bullion, would bring im¬
mediate prosperity, but this, like all his former predictions about
silver, proved false.
British India in June 1893 suspended coinage of silver on pri¬
vate account, and our government also closing its mints to coinage,
took away the heavy demand for coinage, which caused silver bul¬
lion to decline rapidly and largely in price ; just what the Koths-
childs desired and had been striving years to secure. They finally
achieved their crafty work and were ready to place all govern¬
ments on a gold basis, to their enormous profit. '1 hey have already
done the work for Austria-Hungary and made, so says the Finan¬
cial Chronicle, a profit of $80,000,000 by the transaction. They are
now working the United States "for all there is in it." They "have
succeeded in forcing the price of silver bullion down to 67 cents per
ounce and have but slight competition. They are the great silver
trust of the world and defy all individual and banking competition.
The United Sates is the power that can restore silver bullion to its
coinage value of $1.29 per ounce, and headoB the Rothschild trust.
The sole and only cause of the very distressing hard times that
is now prevailing all over our country and growing all the while
more severe, is the very restricted volume of money with which
the people have to carry on their prodigiously immense business.
To add to the severity there has been a frightful contraction in the
past 4 years. The money in circulation in our country has been
37
reduced from $24.44 per capita in 1892 to $21.10 per capita in 1896,
to-wit ;
Date. Money in circulation. Population. Per Capita.
June 30 1894... .$ 1,660,808,708 65,520,000 $ 24.28
" " 1896.... 1,506,631,026 71,390,000 21.10
Withdrawn $ 154,177,682 [Treasurer's Report.]
Here in a nut shell is the cause of the large shrinkage in the
value of all farm and factory products as well as real estate, the
strain in collection of debts, large increase in failures, increase of
idleness, poverty and crime—runs on the banks, and their almost
total inability to loan their customers, and is now forcing such
banks as the First National Bank of Chicago and all the big banks
of New York to send their best securities to London to be sold at
at sacrifice for gold to help them out of trouble.
Shame on such a miserable, weak financial system, which pro¬
duces such intolerable conditions. The business people of France
never go abroad to borrow money. There is always ample at
home for them. A circulation of $50 per capita is maintained for
them.
The Secretary of the Treasury in his official report states that
the money in circulation on 1 July 1896 amounts to $1,509,725,200,
gives the population of our country at 71,518,000, and rates the
per capita at $22.10. In his estimate he gives the gold coin in cir¬
culation (outside of the Treasury) at $456,128,483, but does not
locate it. The total in gold coin in all the banks of every kind and
trust companies does not exceed $226,000,000. In the pockets of
the people there does not exceed $80,000,000. If there is more it
is not reliable for business, as it does not circulate. There is an over¬
estimate as being in existence without allowing for any loss by dis-
truction since the issue began of the following monies :
Greenbacks $346,681,016
National bank notes 214,096,621
Subsidiary silver coin 75,730,781
Total
$ 636,508,417
The estimate of the loss by destruction of such money, since
their issue began, saj', greenbacks in 1862, national bank notes in
1864, and subsidiary silver coins in 1876, is as follows :
Greenbacks $50,000,000
Bank notes 30,000,000
Sub. silver coin 25,000,000
Total $105,000,000
which, with the overestimate of $150,000,000 in the gold coin,
makes a shortage of about $250,000,000, or say $3.50 per capita ;
showing the correct per capita at $17.60.
The bankers of Canada report United States silver coin and sil¬
ver certificates in circulation in that country at $6,500,000. Sir
Morton Frewen, in a published letter, states that a large portion
of the circulation in the Straits Settlements is of United States sil¬
ver dollars ; he further states that he cannot account for this, un-
38
less they were made in London. No loss from silver money is
taken in the estimate of the treasurer.
This large overestimate is for the purpose of making the people
believe that they have a much larger circulation than exists.
Also, should be deducted from the active circulation, the vast re¬
serves of money held by the banks that are not loanable; the
hoards in city, county, and state treasuries, not deposited in banks;
all of which largely reduces the active money. The true circula¬
tion, that the people have the use of, surely does not exceed $8
per capita ; a sum so inadequate that it has brought on a credit
system so vast as to cause all business to be run in a most harrass¬
ing and unprofitable manner.
It is full time that the people were awaking from their lethargy,
and investigating their dangerous condition.
France, which is not as large as Texas, with only 38,300,000 popu¬
lation has the following supply of money ;
Say about $50.25 per capita.
There is but one way through which general relief to our people
can be accomplished, in order to bring 1 hem out of their pre.sent
terribly distressing condition; that is by an ample supply of
money being placed in the channels of trade by our government.
Money is the only power that can re.store confidence. Money is
the only power that can back up the enormous credits which car¬
ry on our immensely vast internal trade, and run the wheels of in¬
dustry profitably. Money is the only power that can keep our
people fully employed at generous wages. Without money bar-
loarism would have sway.
Gold and silver are not and cannot be pioduced in ample volume
for the immense necessities of our people. Gold is not even adequate
for the limited external trade of our country. Silver cannot be
produced in sufficient quantity for the growing wants of the
Asiatics.
Bank notes are not suitable for money, because they are not
and cannot be made a legal tender to pav debts. To circulate
bank notes the banks have lepeatedly without success attempted
to hold a gold and silver basis. When the gold and silver coin
vanished by exportation, which it has often done, the people
were left in the frightful condition of little or no money to run
their vastly immense industries, and as a consequence bankruptcy,
idleness and misery prevailed throughout our country.
Our population numbers about seventy-two million, and now
increasing at the rate of about two million per annum.
The wealth of our country is estimated at about sixty thousand
million dollars, a goodly share of which changes hands repeatedly
during the year.
The annual products of our country are valued at about eighteen
thousand million dollars, which products change hands before
consumption at least three times, making the prodigious sum of
Gold
Silver
Bank Notes
$850,000,000
488,000,000
673,000,000
Total
2,011,000,000
39
fifty-four tljousand million dollars in credits and money required
to make the exchanges.
The debts owing by "our respective county and municipal
governments, corporations and people, are estimated at about
thirty thousand million dollars, requiring annually about one
thousand five hundred million interest to be paid.
The stock gambling of our country is immense.
The above transactions are mainly carried on through credits, but
those credits to retain confidence and move smoothly,must be backed
by an ample volume of legal tender money—otherwise, periodi¬
cally, financial panics will surely prevail.
Besides, there are to be paid with cash, custom duties, internal
revenue, postage, taxes of state, county and municipal govern¬
ment, employees in every branch of business, railroad travel,
hotel lodging, street car travel, retail trade, card gambling, and
small money in hand to change large money ; all combined re¬
quiring a prodigiously vast sum of cash money to make matters
run smoothly ; otherwise, bankruptcy, idleness, poverty and
misery must prevail. Therefore, if money is the power absolutely
essential for the accomplishment of the ahove, why not have an
ample amount provided for absolute success?
The people should have a much larger volume of money pro¬
vided and kept in circulation, at least $50 per capita. If gold and
silver cannot be produced in ample volume, and bank-notes being
unreliable, then why not have our government issue an additional
volume of full legal tender United States notes, backed up by the
wealth of its 72,000,000, which with the gold and silver coin, would
give the requisite volume of money to make success certain ? An
immense amount of internal improvements are absolutely required
throughout every portion of our country, in order to enable mat¬
ters to run smoothly, and for the protection of our people.
1. Good roads, to enable the producers to transport safely their
produce to market.
2. Vast reservoirs in the mountain gorges, to hold the winter
snows and prevent inundatims of the valleys.
3. Slackwatering and leveeing the rivers, to give transportation
at all seasons of the year; also to prevent destruction of life, and
crops from overflow.
4. Improvement of harbors.
5. Fortification of seaports.
6. Erection of a postoffice and other public buildings, witii
secure vaults, in every city, town and village where such are needed
by the people.
7. Tree planting, to restore forests and prevent aridity and
washing the soil into the océan.
All such internal improvements could be gradually made through
an issue by our government of legal tender United States notes in
payment for the land, material and lahor necessary for the work.
The volume of money irr gold and silver coin and United States
notes should be maintained at least at fifty dollars per capita of
our population, which amount of money would enable the backing
up of the vast credit business, the prompt payment of employees,
also enabling the retail trade of the country to be run upon a basis of
40
fifty per cent in cash, in lieu of about seventy-five per cent credit
basis as at present.
To do the business of our country upoa' a cash basis would be an
impossibility. It can only be done mainly with credits, backed up
with ample money : otherwise failure is certain. But a safe per
cent of the retail business should be done with cash, otherwise
failure is equally sure.
For several years the travel on railroads, hotel business, collec¬
tions, employment of the people, wages and salaries, value of pro¬
perty and merchandise, has been gradually falling off, owing to the
reduced volume of money, and wreckage and bankruptcy have fol¬
lowed in its wake.
Views of Dr. Franklin.
Benjamin Franklin, in his autobiography, makes the following
statement: "I remembered well when I first walked about the
streets of Philadelphia, I saw many of the houses in Walnut street
between Second and Front streets, with bills on their doors 'To
Let;' and many likewise in Chestnut street and other streets,
which made me think the inhabitants of the city were one after
another deserting it. * * * Pennsylvania, before it made
paper money, was totally stripped of its gold and silver. * * ♦
The difficulties for want of cash were accordingly very great, the
chief part of the trade being carried on by the extremely incon¬
venient method of barter. When, in 1723, paper money was first
made, there was a cry among th» people for more paper money,
only £15,000 being extant in the province, and that soon to be
sunk. The wealthy inhabitants opposed any addition, being
against all paper currency. * * * The utility of this currency
became by time and experience so evident, that the principles
upon which it was founded were never afterward much disputed,
so that it grew soon to be £55,000, and in 1739 to £80,000; trade,
building and inhabitants all the while increasing, though I now
think there are limits beyond which the quantity may be hurtful,
£40 per capita. * * * By their trade with foreign colonies they
have been able to obtain great quantities of gold and silver to re¬
mit hither in return for the manufactures of this country. * * *
On the whole, no method has hitherto been formed to establish a
medium of trade, in lieu of money, equal in all its advantages to
bills of credit, founded on suflBcient taxes for discharging it, on
land security of double the value for repaying it at the end of the
term, and in the meantime making it a legal tender. The experi¬
ence now of nearly half a century in the middle colonies has con¬
vinced them of it, among themselves, by the increase of their
settlements, numbers of general buildings, improvements, agri¬
culture, shipping and commerce ; and the same experience has
satisfied the British merchants, who trade thither, that it has been
greatly useful to them, and not in a single instance prejudicial.
Views of Hume.
David Hume, English historian, states that, "The British gov¬
ernment took away from America itrf representative money, com-
41
manded that no more paper bills of credit should be issued, that
they should cease to be a legal tender, and collected the tax in sil¬
ver. This was in 1773. Now mark the consequences : This con¬
traction of the circulating medium paralyzed all the industrial
energies of the people. Kuin seized upon these once flourishing
colonies ; the most severe distress was brought home to every in¬
terest and every family ; discontent was urged on to desperation,
till at last 'human nature arose and asserted its rights.' In 1865
the American congress first met in Philadelphia ; in 1776 America
became an independent state."
American Independence.
Great Britain deprived the paper money of Pennsylvania of its
legal tender value and made gold and silver only a legal tender. Soon
both of the latter were exported, which impoverished the people,
engendered hatred in their hearts for their oppressors, which re¬
sulted in a war that brought liberty. At this time our people are in
a peaceful condition. The "money kings of Europe" and this
country are trying to have the greenbacks funded and banknotes
upon a gold basis foisted upon them. When the gold disappears
the banknotes will become worthless, and our people im¬
poverished.
President Cleveland has turned out, for the welfare of the
people, the most unfortunate selection ever made to fill that high
office. His life before entering politics was devoted to studying
technicalities in the law, to secure the acquittal by magistrates of
persons charged before them with crime.
His conduct in New York city in his first canvass, as stated in
the Herald, was reprehensible.
His intermedling in 1885 with the legislation in Congress, in
writing and telling Congressmen what they should do, before
being installed into the office of president, was extreme pre¬
sumption and beneath the dignity of a respectable citizen.
His course in securing the repeal of the silver purchase law of
14 July 1890, through threats and promises, was tyrannical and in
violation of law, as well as decency.
His refusal to purchase silver bullion during the closing months
of the existence of that law, which he a short time previous de¬
clared was mandatory, was a violation of law, and setting laws at
defiance, which merited impeachment.
His most outrageous conduct in executing the sale through
Francis L. Stetson, his late law partner, to the Rothschilds and
Morgan syndicate, of $52,500,000 in U, S. four per cent bonds, at
the very small premium of four and a half per cent, while the open
market value was twenty-one per cent premium, was extremely
culpable, and for it he should have been called to the bar of the
house, to answer, for impeachment.
His course throughout in the sale of $262,500,000 in U. S. bonds,
saddling upon the people this enormoqs principal of debt, besides
$245,000,000 interest upon the same, making the vast sum in prin¬
cipal and interest of $507,500,000 of debt, in time of peace, deserves
the censure of every honest citizen.
42
Bond Transactions.
Here are given a few opinions of leading newspapers in regard
to President Cleveland's bond sales ;
San Francisco Bulletin, 20 February 1895 : "The executive de¬
partment, whether Federal, State, county, or city, cannot create
a bond issue. This branch of the government can simply order
the sale of bonds previously authorized by the legislative branch
of which it is the head, ^t is to be noted that two of the last three
bond sales were made while congress was in session, and therefore
authority for their issue could have been obtained if so desired.
The other sale was made last November, just before congress con¬
vened, and there was an unseemly haste in the matter, as though
Congress might not approve of the action. The last sale of bonds
was also hurried through, being completed, as alleged, about mid¬
night, and on terms that are certainly open to objection."
New York Sun, 9 February 1895, on the deal of .$100,000,900
bonds : "It is a serious question whether this old act of 1862 is still
in force, or, if it be in force, whether the bonds the President has
sold are authorized by law."
Boston News Bureau, 21 Jan. 1896: "There is a good deal of
question as to whether the bonds recently and about to be issued
legally come within the provisions of the act of Jan. 14, 1875. But
under this act there recently have been issued $100,000,000,10-year
5s, and $62,315,400, 30-year 48.
New York Sun, under the heading "Client and Counsel":
"Francis Lind Stetson, the lawyer who conducted the late bond
negotiation, explains the part he took in the transaction by stating
that he represented J. Pierpont Morgan. Mr. Stetson says he has
been Morgan's counsel since 1887. As Grover Cleveland was a
partner of Mr, Stetson from 1889 to 1892, Mr. Morgan must have
been a client of Mr. Cleveland as well as of Mr. Stetson. The ex¬
planation of Mr. Stetson presents Mr. Cleveland as conducting a
transaction through a former partner in which there was a profit
of from $12,000,000 to $16,000,000, according as the syndicate may
sell the bonds."
M. B. in the American Banker: "In selling these bonds they
were given to a syndicate at 4 per cent premium, when, at the
same time, they were worth 20 per cent premium in the open
market, and in the last sale of $100,000,000 of bonds, all bonds
bidden for by fictitious bids were also given to this syndicate,
when at the same time, other parties offered to pay 7 per cent
more for them. So that, in all these bond sales, millions more
were tossed into the lap of this syndicate at the expense of a tax-
ridden people."
May we not conclude that there has been an amendment made
to that grand declaration of Abraham Lincoln that "This is a
government by the people, and for the people," and that that
amendment is, "This is a government of the people for the benefit
of J. Pierpont Morgan, Belmont, Rothschild and their syndi¬
cate successors?"
San Francisco Bulletin, under the heading "The Syndicate
Protectorate : "However this may be and whatever may happen,
43
the national disgrace of allowing the credit of the government and
the solvency of the Treasury to depend upon the support of a spec¬
ulating ring of cormorant money-lenders is none the less apparent.
Nor will it do to lose sight of the danger of the situation. It
would he better for the United States in every way that the entire
gold reserve should be withdrawn and that the Government
should even suspend specie payments than that the finances of the
nation should fall under the control of such men as the Rothschilds
and Morgans. It is not necessary to insist, though it can be easily
shown, that the money kings of the world have no other motives
than the love of gain.
"No self-respecting nation should be willing to consent to be sub¬
ject to the behests, not to say the whims, of the great money-lenders
of the world. Such a condition is certain to destroy the independ¬
ence of the country. * * It remained for President Cleveland
and Secretary Carlisle to take the first step toward the enslave¬
ment of the country to the money power. The very men who are
now making a virtue of protecting the treasury were engaged in
using the greenback syphon to drain the treasury of gold for the
purpose of creating distrust and forcing the issue of more bonds.
A crisis was reached. Then, in their folly and financial cowardice,
if they were not influenced by other considerations, Cleveland and
his secretary made the onerous and disgraceful contract with the
syndicate, as the manatrers of the New York and London money
ring call themselves. They stood the government up in its appar¬
ent distress and sold it sixty odd millions of gold for long-term
4 per cent bonds at 16 per cent below their market value, and they
are now being praised for their financial wisdom, integrity and
generosity. It remains for Congress to expose the transaction and
to prevent a repetition of the disgrace."
From the Escondido (San Diego County) Advocate: "A cable¬
gram from London under date of the 30th ult. says: 'W. E.
Curtis, assistant secretary of the United States treasury, reached
London today in order to arrange for the completion of the bond
contract.' * * * * Now isn't that business? One
of the partners in the bond syndicate is a citizen of the United
States. The negotiation of the loan was done through him.
Everything was arranged, a part of the money is said to have been
paid, and all that the United States treasury has to do is to de¬
liver the bonds. And now, mark : an assistant secretary has to go
to London to complete the bond contract, and after he gets there
he has to await 'further instructions from the treasury depart¬
ment.' Not only so, but another attache of the treasury depart¬
ment, Logan Carlisle, (doubtless a son of the secretary) is now on
the ocean in charge of the bonds. We have an ambassador at the
Court of St. James, on a salary of $17,500 a year, as well as a con¬
sul at London, whose salary and perquisites makes his berth
worth more than the other, but neither of these gentlemen must
be entrusted with this business. No, a special envoy—an assist¬
ant secretary of the U. S. treasury must be sent to complete the
business, and then after him comes another representative of the
treasury department to carry the bonds."
San Francisco Bulletin : "It was an extremely bad sign of the
times to see Cleveland's deal with the Morgan-Belmont syndicate,
44
which cost the people of the United States at least $10,000,000
received with so much indifference and seeming apath}'. It spoke
very badly for the intelligence and courage of the leading men of
the United Stales that such a shameless act was not visited with
an overwhelming storm of indignation. The revulsion of feeling
has come, however, and we owe to Senator Marion Butler of North
Carolina a debt of gratitude for having the courage to come out
openly and boldly and say what he thinks about the leader of bis
party. Senator Butler says, among other things: 'Cleveland is
going to England to get gold when he could pay the bonds in sil¬
ver. He does not pay them in silver because he is a hireling of
the goldbugs. I charge it here, and I will charge it on the floor of
the United States Senate. We shall never see better times until
we drive traitors out of the White House and get an honest free-
silver man for president.' Here is a man who has the courage of
his convictions, and who evidently does not hope to be invited up
to the Administration pie counter and asked to help himself. And
what is Cleveland doing now? Loaflng and fishing around Buz¬
zard's Bay, paying no attention to hie official duties, though he has
in his hands some thirty cases of armj' and navy courts-martial
and courts of inquiry for review, some of which affect most serious¬
ly the character, reputation and standing of the parties involved.
Once in a while some Cleveland cuckoo bursts out with the as¬
sertion that the present Administration will go down to posterity
as one of the greatest and best in the history of the nation. If so,
heaven help the rest, for if there ever was an Administration
characterized by imbecility, insanity, stupidity and general
worthlessness it is the present one. Grover Cleveland may not be
a dishonest man in public life, but he is something almost as bad ;
that is, a narrow-minded, prei'udiced official, stubborn to the last
degree, and wise only in his own conceit. We can guard against
a knave, but there is no protection against a foolish man."
Cleveland's Appeal to Congress for a Better Power to
Issue Bonds.
"This leads me to earnestly present the desirability of granting
to the Secretary of the Treasury a better power than now exists to
issue bonds to protect our gold reserve when for any reason it
should be necessary. Our currency is in such a confused con¬
dition, and our financial affairs are apt to assume at any time so
critical a position that it seems co me such a course is dictated by
ordinary prudence." Gkovkb Cleveland.
Executive Mansion, March 29,1894.
The " Money Kings of Europe" are bent on having the green¬
backs funded into bonds, and our government and the banks of
our country put upon a gold basis, to enable them to make a cool
$100,000,000 profit, just as they made $80,000,000 profit in putting
Hungary upon a gold basis.
Here is what the New York Sun had to say under the heading,
"A Futile Message," in regard to the message sent in 1893, by
President Cleveland, to Congress : "In the message which Presi¬
dent Cleveland sent into Congress yesterday, he proposes that the
$500,000,000 of outstanding legal tender notes shall be retired and
45
cancelled by the sale of an equal amount of fifty-year 3 per cent
bonds, payable in gold, principal and interest, and receivable at
the Treasury as security at their par value for national bank cir¬
culation. This is in efiect, a proposition that the country shall
pay the national hanks $15,000,000 in gold every year for fifty
years, or $750,000,000, altogether, for supplying it
with $500,000,000 of paper money which it now gets for nothing
except the loss of interest on the comparatively small amount of
gold needed for redemption fund! The naked statement of this
scheme is suflScient to insure its rejection by Congress without de-
hate, and by the entire body of our citizens except perhaps
national hank officers."
It was the greenback which saved the hanks from destruction in
the panic of 1873, when all of them, excepting four or five, sus¬
pended payment to depositors for about seven weeks. Had the
banks been on a specie basis, they could not have recovered in
ten years, for nearly all the gold and silver had been exported to
Europe.
It was the greenback and silver certificates which saved the
banks in the crisis of 1893 ; had they been on a gold basis, in lieu
of about 600 going under, more than 6,000 would have collapsed
and never recovered. They would have died from the "gold
disease."
The bankers in their great gatherings at Baltimore, Chicago and
Atlanta, also at every meeting of the State Bankers' Association,
have urged the destruction of the greenbacks, and their funding into
bonds, and the banks authorized to issue all the paper money, with
gold basis, for the people. In obedience to their command. Presi¬
dent Cleveland has several times urged the scheme in his message
to Congress, for adoption, and hut for the Silver men and Populista
in the Senate, the villainous scheme would have carried. They
are still at their vile work. Have the bankers forgotten the fi¬
nancial panic of 1837 to 1846, and that of 1857 to 1862, when they
filled the land with their "wildcat" and "stub-tail" depreciated
and worthless hank notes, causing widespread suffering and im¬
poverishment to the people?"
Would the bankers again force the business men of the country
to subscribe to and hunt over a counterfeit detector of many hun¬
dred pages to learn the genuine hank notes from the counterfeits,
also to keep posted upon the failing banks?
Have the hankers failed to read the history of the banking ways
in this country previous to the issue of the greenbacks in 1862 ?
Have they who are young in the business failed to read of the
bribing and corrupting of members of the legislatures to secure
charters for their hanks with the privilege to issue bank notes, as
was done in nearly every state ?
The writer in the forties was a dealer in uncurrent hank notes,
and knows all about the many villainous schemes and fraudulent
practices, carried on by men bearing the name of bankers, in se¬
curing charters for banks and issuing hank notes based on specie.
Even those who acted honorably, their hanks failed for the want
of specie, when it disappeared by exportation and the hank notes
became worthless.
No bank law can be made safe enough to secure a stable and
46
safe bank note circulation based on gold, or even on gold and
silver coin, to save the people from loss and the country from fi¬
nancial panic.
The government only should issue all the paper money as well
as the gold and silver coin and minorcoinfor the use of the people.
Our 72,000,000 people and all their wealth is behind the govern¬
ment money.
There has always been feuds among the bankers, which not only
kept themselves but the people also m hot water. The war between
the SuflPolk bank of Boston and the banks of Maine and other
New England states continued for years.
The bankers of Michigan, who procured charters for banks to
issue bank notes in 1835, '36 and '37, did it by stretching the blan¬
ket, in making one box of silver and nine boxes of nails presented
to the auditor do full duty. The box of silver was opened for him
to count. He would say, "no use in opening the others ; I am sat¬
isfied ; go ahead and issue your bank notes" (based on one box of
silver and nine boxes of nails).
The Union bank and the Brandon bank flooded the state of Mis¬
sissippi with their worthless bank notes, so did the banks in Ala¬
bama, Arkansas, Illinois and Ohio. The little Ohio river town of
Gallipolis bad its bank, which shipped loads down the Ohio and
Mississippi valleys for distribution.
- The gold and silver coin and greenbacks are good enough money
for any one who lived during the days of wildcat bank notes.
Presidents Harrison and Cleveland and the young bankers to the
contrary notwithstanding.
If the writer were not afraid of tiring his readers, he would give
them a history of the heathenish, worthless and rotten banking
systems that our people have had to conduct their business under,
prior to the greenbacks. Yes, the writer has had to ponder over
and over the counterfeit detector issued weekly by the late emin¬
ent financier, John Thompson,(whose obituary he wrote a few years
ago for the Union) to learn of the new counterfeits being issued,
also of the latest failures among the banks.
Do the farmers, merchants, manufacturers or wage earners de¬
sire such a system restored ? I guess not. The Knights of Labor
have demanded the issue of the paper money only by the govern¬
ment. No bank money.
It is only wily, cunning bankers wbo plead for the privi¬
lege? John Thompson and other ahle bankers, who were familiar
with the old rotten system, declared for greenbacks.
Banking is a legitimate, useful and honorable business, when
conducted in a straightforward and business way. All banks
should be confined to the legitimate business of banking, deposits,
discount and exchange. When that is done under full govern¬
ment supervision for the full protection of the people, there will be
no war by the people against the banks. But so long as bankers
contend for one of the strongest powers of the government, the war
will continue to be waged.
Let us have a truce and peace, otherwise the bankers will wreck
their banks as they are now doing, also wreck the people.
47
Condition of Banks.
Here is a statement of the condition of some of the leading na¬
tional banks of New York ánd Boston on Aug. 29, 1896, as tal^^
from the American Banker :
NEW YORK CITY.
Deposits &
Specie
Ratio.
Circulation.
(gold & silver)
American Exchange
,$19,634,000
$408,000
Bank of Commerce
. 16,113,000
355,200
2H
Central
. 8,267,000
152,000
2
First
17,788,000
457,600
2%
Western
. 11,198,000
219,300
• 2
Union
8,482,600
401,200
4%
Liberty
. 2,396,200
30,600
IK
Chase
. 16,450,200
1,298,000
8
Fourth
. 17,525,400
1,048,200
6
Gallatin
5,563,000
246,900
4K
BOSTON
BANKS.
Tremont
, 1,507,000
50,000
3Kc
Atlantic
1,667,000
55,000
3K
Hancock .,
843,000
12,000
IK
Shoe and Leather
. 3,325,000
55,000
IK
Shawmut
. 7,762,000
238,000
3K
Bank of North America
. 1,526,000
38,000
2K
Boston
2,521,000
68,000
2K
Third
. 6,986,000
267,000
4
Broadway
. 2,010,000
48,000
2K
Commonwealth
. 5,646,000
157,000
3
Also, condition of others as
taken from
the report
of the
comptroller of the currency of 28 September 1895.
ROCHESTER, N. Y.
Flour City N'l
Traders' Nat'l
1,781,977
2,803,114
PHILADELPHIA, PA.
30,561
66,972
2c
2K
Third Nat'l
Second Nat'l
Tradesmen Nat'l. . .
Chestnut Nat'l
Commercial
2,764,648
1,196,976
3,556,067
3,058,158
1,910,608
CINCINNATI, O.
37,477
44,590
63,944
112,257
63,972
11.<c
4
2
4
4
Fourth Nat'l
Market Nat'l
Fifth Nat'l
2,719,313
1,938,336
1,328,313
DETROIT, MICH.
22,270
13,876
31,190
Ic
1
2K
Preston Nat'l
First Nat'l
4,839,148
4,578,125
MAINE—BELFAST.
251,257
229,754
5 1-5
5K
Peoples
193,000
5,500
3c
48
EASTPORT,
Frontier 250,000 5,250 2^c
GARDINER.
Merchants 107.000 551
Oakland 58,331 781 1)^
PORTLAND.
Cumberland 248,568 8,100 3%c
Portland 1,440,547 34,011 2>é
Casco 1,676,029 6,703 3^
Chapman 446,746 13,877 3M
BURLINGTON—VERMONT.
Merchants 1,329,149 37,908 2%c
Howard 663,846 23,651 3%
RUTLAND.
Merchants 490,646 9,040 /2c
If the writer had space he could show the weak condition of 95
per cent of the banks, to be put on a gold basis.
Crisis of 1893.
"Whom the gods would destroy they first make mad." This
aptly fits the bankers now, who are bent on a gold basis, regardless
of the consequences. A specie basis system carried the banks
down and brought on that frightful panic, which lasted from 1837
to 1847. A specie basis carried the banks down and brought on
that destructive financial panic, which lasted from 1857 into the
war of the rebellion. When the financial panic broke forth in
1873, the banks throughout the country, except the Chemical of
N. Y. and a few others, suspended payments to depositors for
about seven weeks, but being on a greenback basis were enabled
to resume payments in that short time. Had they been on a gold
basis, most of them would not have succeeded in resuming in tien
years. Again, in 1893 the banks were on a greenback basis, which
enabled them to weather the financial storm with only 600 banks
being carried down. Had they been on a gold basis, but few
banks would have escaped wreckage. In old times the ratio
of the specie basis ranged in some states as high as 33)^ per cent.
At this time a vast number of the banks are very deficient in both
gold and silver.
Yet with the small ratio of specie held by the banks for deposits
and circulation, the bankers are working hard to have the green¬
backs funded into bonds and their banks placed on a gold basis,
while certain bankruptcy will surely come to them and the people.
Therefore it looks as if the bankers were going mad. If their
scheme is successful, the result will be that all the banks
throughout the county will be crushed, except a very few strong
ones which will be left and they will establish branches and do the
business. Even Mr. Edward Atkinson's, the Third National Bank
of Boston, had only 5}4 cents specie to each dollar of deposits and
circulation. The National Union bank of New York had only
4% cents specie. Mr. Jos. C. Hendrix, president of the National
bankers' association, is at the bead of this bank. The Preston
49
National bank of L'étroit held only 5 1-5 cents specie. Mr. F. W.
Hayes is president of this bank and be is vice-president of that
association.
U. S. Financial System.
A system of finance, under which our people have had, and still
have, to conduct their business, which has kept and still keeps the
volume of money so limited and restricted that it forces such of
them having good enterprises to start, not finding money in their
own country, to go to Europe and sell their bonds—frequently at a
heavy discount—until an enormous foreign indebtedness of about
$8,000,000,000 bas been piled up against us, requiring the pay¬
ment annually of about $150,000,000 in interest ; that has checked
railroad, also ship-building, necessitating our products sent abroad,
■to be carried in foreign vessels, taking an immense sum of money
annually from our people to pay freight to foreigners ; that requires
a too enormously large portion of our internal trade to be done
almost entirely upon credit; that permits the making of contracts
for the payment of debts in specific money, such as gold, which
when exported or boarded becomes very scarce, thereby creating
hardships and disarranging most seriously all business ; that allows
bank notes which are not and cannot be made a legal tender, but
have to be based on gold or bonds to give them their value in
order to circulate, and when the gold disappears through export¬
ation or hoarding, such bank notes become worthless, causing
great losses to the people and greatly injuring all business ; that
causes 95 per cent of all persons entering business to fail during
■their business career ; that periodically brings all over our country
a most frightful and distressing financial panic, which checks con¬
sumption and enforces rigid economy among the people, creating
general bankruptcy and widespread ruin ; decreases the value of
all products and property, largelj reduces salaries, wages and
rents, throws immense numbers of willing workers into idleness,
causing many to roam over the land without avail in search of
work, entailing upon many poverty, misery and crime—greatly
checks education and the support of religious institutions—is
radically wrong and too barbarous for our active, energetic, in¬
dustrious and progressive people. It should be no longer tolerated ;
but a generous system of finance, keeping all the while a full and
ample volume of money in our country to enable the successful run¬
ning of all our prodigiously vast industries, thus affording the people
full employment, prosperity and happiness, to accord with our im¬
mense progress and civilization, should be adopted.
The money of the United States is a creation of law, enacted by
Congress, it is made for one purpose only—that is, to pay debts.
In paying debts it enables settlements for services and the ex¬
change of products, which carries on and builds up commerce.
The par value of money depends solely upon its having full debt
paying power. If it is excepted from paying certain debts then it
is discredited and subject to depreciation. Therefore, it is the
duty of our people to be vigilant and see that our government is¬
sues money only having full debt paying power ; genuine money,
honest money. Such money will at all times be worth 100 cents
to the dollar, provided congress prohibits all debts from being made
50
payable in specific money. Creditors should not be accorded priv¬
ileges over debtors. Both should stand before the law on an
equality._ It is against public policy to permit debts to be made
payable in gold or any particular kind of money. If permitted,
and such gold or other kind of money becomes scarce from export¬
ation, hoarding or being cornered, then such money is made
more valuable, by legislation, than any other money not possess¬
ing such debt-paying power, and thus debtors, to pay their debts,
are forced to buy such scarce gold money and pay a premium, to
their great loss and injury. It hinders trade, hampers commerce,
and causes great loss to the people. Farmers, laborers, merchants
and land-owners would be forced to receive the depreciated money,
while the bond and holders of notes with special gold contracts,
only would receive the most valuable money.
The money supply should always be generous and ample for the
successful running of all of our industries. It should never be allow¬
ed to decrease from any cause, but kept increasing with the in¬
crease of the population and industries. If coin should be export¬
ed for any reason, or paper money should be retired from circula¬
tion, then other money, made by our government only, should re¬
place the same. Had such been the case the people of our count¬
ry would not have suffered from the periodical financial panics that
have heretofore prevailed over our land, nor would lliey at this
time be suffering from the crisis that is now upon us. The volume
of money in the channels of trade regulates prices of all products
as well as the pay for wages and salaries.
If the money volume is ample, all is well. If it is insufiScient, aU
is wrong. Therefore it behooves the people to be ever on their
guard, and watchful of all legislation relating to financial matters,
to see that no wrong be accomplished.
Power of Money.
The condition of the people in every country depends upon tiie
volume of money in circulation and its full debt-paying power. If
the volume of full debt-paying-power money is ample, to keep all
the people fully employed and thus enable them to consume
generously of all the products, then they will be prosperous,
happy and honest ; otherwise poverty, misery and crime will pre¬
vail to a large extent. Take as an illustration the following
countries ;
CHINA.
Some years back its money volume was only about $1.75 per
capita, mostly of depreciated, fluctuating in value, cumbersome
copper cash (coins with a square hole in the center), and silver
bullion. Then their condition was the most intolerable conceiv¬
able ; but of late years the money has increased to about $2.75 per
capita ; this includes the private bank note and individual paper
currency, also silver coin. Just in the ratio of the increase in
money has the wages and condition of the great masses of the
people improved. Within a few years the Chinese will absorb
very largely of the silver bullion product of the world, unless
Rothschild succeeds in having them put on a gold basis, when
they will take most all the gold product of the world, to give them
51
only a moderate supply of money. A large mint with elaborate
machinery has been built at Canton to coin silver bullion into
silver coins, which have been made a legal tender. The exports
from China, as well as all Asiatic countries, are increasing very
largely.
MEXICO.
About 1858 its money circulation did not exceed $3 per capita.
The writer at that time was in that country and saw the wretched
and miserable condition of the masses, most of whom were peons
or-slaves whose wages were about a reale (12j4 cents) per day.
Bandits roved over the land, who frequently attacked the armed
conductas, carrying silver from the mines to the seaports, to be
shipped to Europe. In 1864 the writer was again in Mexico on
the Kio Grande, buying and shipping cotton. Money was fp
more plentiful then and labor scarcer, as the masses were in
either the Mexican or Maximillian army. Then he usually paid
laborers $1.50 to $2 per day, and their condition in a short time
improved rapidly and the necessaries and conveniences of life
began to show up around their homes. At this time the money
volume is over $9 per capita, rating the population at about
13,000,000, as follows :
Mexican silver dollars $85,000,000
Banknotes 32,666,130
$117,666,130
Banking.
The three leading banks of the city of Mexico have the follow¬
ing amounts in Mexican silver dollars, also circulation :
Name of Bank, Silver Dollars. Circulation Bank Notes.
National Bank $28,593,450 $21,250,154
London Bank 10,614,949 9,501,476
Mortgage Bank 1,295,730 1,914,500
$40,504,129 $32,666,130
These banks have branches in all the large cities ; besides there
are many private banks. Just in the ratio of the increased money
supply has the condition of the masses of the people and of the
country wonderfully improved. Railroads have been and are still
being constructed in every portion of the country, also many facto¬
ries and vast irrigation systems. Mouths of several rivers are be¬
ing jettied and grand harbors and wharves are being constructed.
Mr. Howard Hinds of Sonora lately informed the writer that he
employs about 1,000 men in his mine, and the least wages he pays
is, to laborers, 75 cents, and from that up to $10 per day ; the latter
price in gold to expert American Mechanics. Carlos Conant of
Gocorito, Sonora, has constructed a vast irrigation system to irri¬
gate 300,000 acres of choice land. Wages of laborers have ad¬
vanced 500 to 800 per cent. Under the able and wise administrar
tion of Porfirio Diaz, one of the most industrious and generous
men of the country, Mexico has made astonishing progress.
The officials in their anxiety to force the country onward have
52
made two serious mistakes; one was in issuing about $110,000,000
bonds, principal and interest payable in gold, to-wit :
Mexico produces but little gold, therefore as Mexican silver dol¬
lars are excepted from paying the interest or principal of (his heavy
debt, silver dollars have to be sold as bullion to acquire gold to
make the payments. This exception of the silver dollar from such
payment of debts has alone caused it to depreciate from its par
value to its bullion value of 54 cents. Just as our greenbacks were
excepted from paying custom duties, our merchants were forced to
sell them at a heavy discount to procure gold to pay duties. When¬
ever money is discredited from paying debts, then it becomes de¬
preciated under its par value of 10Ö cents. It is wrong to discredit
any money issued by government from payment of debts.
The other serious mistake was in permitting the banks in Mexico
to issue bank notes, a prerogative of the government, which no cor¬
poration should have been jjermitted to acquire. It is a sovereign
power of the government alone. The government should issue all
the money, gold and silver coin, also paper money. The govern¬
ment of Mexico also should become the custodian of the silver
dollars and for the the convenience of the people issue silver certi¬
ficates against the same, and save them from the worry and an¬
noyance of handling the cumbersome coin, also to prevent abrasion
and loss.
Bleichroeder and Rothschild got ahead of Mexico, and are now
getting our country into their clutches and making slaves of our
people.
Mexico as well as the United States should throw oflF the
oppressive foreign financial yoke and maintain their dignity and
independence for which the people fought and gained from their
tyrannical rulers. The importations into Mexico of late years have
fallen off, while the exports have increased enormous¬
ly, and that country is now advancing onward and upward in
civilization and in the near future will become a powerful nation.
Its people are far ahead in every respect of the those of Turkey
or China and are making rapid strides in every branch of business.
Their money circulation is much larger than that of either and is
increasing very rapidly. Not a great many years back the circu¬
lation was about $3.50 per capita, but now taking in all forms
of money, gold and silver coin, government notes and bank notes,
it ranges about $8 p>er capita. From 1890 to 1894, $64,559,679 in
silver was coined, also $6,600,000 in gold ; and in _ 1895 something
over $23,000,000 in silver was coined. Thus the increasing power
of money is rapidly building up that country. Ten years back the
exports from Japan to the United States were comparatively small.
Last year it sent to our country merchan¬
dise to the value of about $54,000,000,
1888, 6)4 per cent interest
1890, 6)4 " "
1893, 6)4 " "
Tehauntepec, 5 per cent interest.
£10,500,000
, 6,000,000
. 3,000,000
2,700,000
£22,200,000
JAPAN.
53
while our country sent Japan only about $9,000,000, leaving a
balance in trade against the United States of about $45,000,000.
Japan is taking our silver bullion in part pay for this enormous
balance, at 67 cents an ounce. If our country bad free coinage of
silver that balance would be settled in silver bullion at its coini^
value of $1.29 per ounce. Bothschild is making a great effort to
get Japan on a gold basis, to make the big profits in the scheme;
in case they are successful then another enormous demand will
spring up for the scarce gold.
TURKEY
Has the smallest supply of money of any country in Europe, except
Servia, say about $4 per capita. The masses of the people are in
the lowest stage of poverty, and misery. Cunning and theft
prevails among them. All progress basceased.
RUSSIA
Has double the money supply of Turkey, say about $8.50 per
capita, and the condition of its people is very far ahead of the
Turks. Extensive railroad building is going on in that country.
Progress would be more extensive and rapid, but the " money-
kings of Europe " dominate over the finances of that country and
no step can be taken without their approval. In fact the power of
the Bothschilds is felt in every government. It is frequently pub¬
lished in the papers that they have a member in the cabinet of
every country looking after their interests.
INDIA.
The money circulation of India in 1870 was estimated at less than
$2 per capita, and the condition of the people was most hideous. But
since then that country has absorbed an immense volume of silver
bullion, produced on the western hemisphere, which has been
coined into money, which with the large paper circulation of the
banks, lias built up that country rapidly, giving the people a magni¬
ficent irrigation system, placing over 30,000,000 acres of land under
irrigation, enabling the certain production of large crops ; a grand
transportation system of canals and railroads extending far into
the interior, enabling the safe, speedy and cheap transport of the
immense crops of cotton and wheat to the seaports for trans-ship¬
ment to European ports, there to compete with our products. The
East Indians were making too rapid strides in civilization, therefore
to check their progress the British closed the mints in June 1893,
to the unlimited coinage of silver, which action is checking the
^se in wages and price of products, also the building up and run¬
ning of their extensive and growing manufacturing system.
From 1889 up to the closing of the mints in June 1893 about
$220,000,000 silver bullion was coined into rupees, the silver coin of
British India.
Our unfortunate legislation on the eilver question has given the
East Indians a huge silver stick to crush our industries.
Money is power that builds up and makes or crushes and des¬
troys countries, as its volume is increased or decreased.
54
FRANCK,
Smaller than Texas, has about 38.000,000 population and has the
largest supply of money of any country in the world, to-wit :
About $50 per capita. Which large volume of money has made
that country exceedingly prosperous and powerful. The gold, silver
and paper money are on a parity, maintained thus by their equal
debt^paying power. Contracts for the payments of debts is not
allowed to be made in specific money, (gold) only in the legal
money of the country. Debtors have the right to pay their debts
in such legal money as they may have.
"No country is more misunderstood than France and her cur¬
rency. The bank of France notes are literally fiat money. They
say '50 francs,' '100 francs,' and do not promise to redeem the bank
note in any kind of coin. The 5 franc piece in silver is the general
legal hnder of France. They maintain the parity
of • gold, silver and paper by main strength."
StiH the bank pays its notes at its option in either silver or gold
coin. This power is used to prevent the export of gold coin. In
1790 the money supply of France was low, the masses of the peo¬
ple Were without work and snfiering for the want of bread. They
sent a committee to King Louis and asked for work or bread. He
told his Minister to throw them a stone. They revolted and guil¬
lotined the King. A National Assembly was elected which confls-
cated-the estates of the nobles and clergy, and to carry on the gov¬
ernment issued an immense amount of "assignats," which were
made redeemable only in confiscated lands. It acted as cnrrency,
paying debts, and enabled the government to wage war with Eu¬
rope. By 1797 about $9,(XX),000,()00 was estimated to be in circnla-
lation, but the English people had counterfeited the "assignats" to
such an extent that the good could not be told from the bad, so
they went out of existence, just as our continental money did, which
the British counterfeited in order to cripple our country, but they
failed. The "assignats" had the effect of increasing the land own¬
ers of France from 30,000 in 1790 to near 4,000,000 by 1800.
The French people love their homes and their country, and but
few emigrate.
Politicians on the stamp speak sneeringly and contemptuously
of "assignats" and continental notes as being worthless paper
money, and ridicule our greenbacks as similar and undesirable, thaiS
should be put out of existence.
Neither assignats nor continental notes were invested with legal
tender power to pay debts, consequently were not money. The
assignats lortunately we^e redeemable in lands, which gave France
several million loyal land owners. The continental notes were
payable in Spanish milled dollars, only a limited numtierof which
were in circulation. Connterfeits drove both out of existence, but
both worked wonders for their respective countries.
Treasury notes have always been resorted to by oar government
Gold, about
Silver,
Bank notes,
!f 850,000,000
488,0(X),000
673,000,000
I 2,011,000,000
55
in all its trials, to bring it out of trouble, and our present greenbacks
saved the life of our Nation.
Benefits of Silver Coinage.
The-vasUy most important question now before the people of the
United States is the financial, and the leading portion isthat of free
coinage of silver at the ratio of 16 to 1.
The benefits of the free coinage of silver at 16 to 1 would be im¬
mense to the people of the United States, also to mankind through¬
out the world. (I will drop fractions of cents in computing.)
From the adoption by Congress of the first coinage law, in 1792,
up to the adoption of the coinage law of 1873, both silver bullion Mid
gold bullion had unlimited and unrestricted coinage at our mints
at a fixed ratio, with but slight changes as made in the coinage
laws adopted after. Xhe coinage law of 1837 fixed the value of pure
gold bullion at $20.67 per ounce, payable in gold coin, and that of
pure silver bullion at $1.29 per ounce, payable in silver coin,
therefore the bullion in both metals was maintained with but
slight variations at the value fixed by that coinage law, say $20.67
per ounce for pure gold bullion and $1.29 per ounce for pure silver
bullion, or 16 to l,<one ounce of pure gold bullion for 16 ounces^ of
pure silver bullion). The coinage law of 1873 continued the unlim¬
ited coinage of gold bullion at $20.67 per ounce, therefore its value
has been maintained ; but the unlimited and unrestricted coinage
of silver bullion at $1.29 per ounce was stopped; therefore, as the
fixed money value of silver bullion, given it by our government,
was taken away, it had to be sold on the market as a commodity,
and the price fell from $1.29 per ounce to 67 cents per ounce, at
which price the governments of Europe, which do not produce
silver bullion, are now buying and having it coined into legal ten¬
der silver coins at 15)^ toi and.;le88, making the enormous profit
of about 100 per cent. Also the "Money Kings of Europe" are
making enormous profits dealing in it. The Financial Chronicle
reported that the Rothschilds made $80,000,000 profit in the con¬
version of Austria-Hungary to a gold basis. They are placing Chile
on a gold basis. They have made a loan for China on gold bonds.
They are now making efforts toget the United States and Japan on
a gold basis ; also, with Bleichroeder, they have Mexico in their
clutches jto the extent of about $112,000,000 in gold bonds bearing
mostly 6^ per cent interest, and Argentina with gold bonds amount¬
ing to $225,000,000. If they are successful in such conversions,
there will spring up an enormous demand for gold, that the product
of the world cannot supply. The shrinkage in value of silver bul¬
lion will be great, as thereafter it will only be used for su bsidary
coinage and the arts ; also the further shrinkage in products and
wages will be large ; the great masses of the people will be en¬
gulfed in poverty; the Rothschilds will continue to rise as a
power of the world, like King Solomon of old, whose magnificent
temple is said to have contained gold, silver and brass ornaments
of the value of $35,000,000,000.
Are our people content to surrender their liberties for the
ose of gold?
History tells us that about 1806 there was but a very limited
56
amount of either gold or silver coin in circulation in otrr country ;
that it had been largely exported; that there was not sufficient
silver for change; hence President Jefferson requested James
Madison, Secretary of the Treasury, to direct the suspension of the
coinage of the standard silver dollar until further orders, and there¬
after to coin the silver bullion into subsidiary silver coins only.
The subsidiary coins were a full legal tender for the payment of
debts, besides were more needed by the people than the dollar
and could not be so readily gathered for export as the dollar.
Lately John Sherman in opening the republican campaign at
Columbus, 0., said: "This order of Jefferson, I suppose, would
be called by our populistic friends, 'the crime of 180C.' " For the
same réasons President Jackson in 1835 renewed the order con-
'tinuing the suspension of the coinage of the standard silver dollar.
From 1830 our gold coin had been largely exported and in 1834
was'continuing to be exported, hence President Jackson recom¬
mended that Congress enact a law for its debasement, which was
done. The writer, in old times, often bought the gold coins of
- eleven-twelfths fine, coined previous to 1834, and paid as high as
"5 per cent premium for them. Senator Sherman further said:
"This law heartily approved by Andrew Jackson, would now be
called 'the crime of 1834.' " But the measure debasing our gold coin
•did not'fully accomplish the object, because by 1837 nearly all cur
gold and silver coins had been exported, which took from the
"banks their coin reserves held for deposits and bank note circula-
'iiom causing nearly all of them to fail and their notes to become
worthless, leaving our people without money ; a sad plight indeed,
but it brought on that most frightful and destructive panic of 1837.
President Jackson was for paper money to be issued directly by
thé government and made a legal tender to pay all debts. But
Nick Biddle and all the other bankers foiled him in his attempt.
Both Jefferson and Jackson were honest, patriotic and very able
presidents, but they had that same dominating bank power to
contend with that our people now have.
Senator Sherman, continuing his speech, said: "In 1853, upon
the report of Senator Hunter, when Pierce was president and
when all branches of the government were under democratic con¬
trol, congress reduced the quantity of silver in the fractional coins
(half dimes, dimes, quarters and half dollars) more than 6 per
cent, directed the purchase of the silver for their free coinage and
made them a legal tender for $5 only, leaving gold still practically
the only full legal tender United States coin. This, i suppose,
would now be called the 'crime of 1853.' "
This law, debasing the subsidiary silver coins, was enacted Feb.
21, 1853, while Millard Filmore was president. Franklin Pierce
was not inaugurated president until March 4, 1853. It was an
amendment to the coinage law of 1837 only so far as it effected the
subsidiary silver coinage. The coinage of the silver dollar and
gold coins was still left in force under the law of 1837, which was
only amended and not repealed. The amendment was a wise
measure.
Rothschild, shrewd bullion dealer, had an agent, August Bel¬
mont, in New York city, and another, Isaac Nathan Hanau, in New
Orleans, secretly buying up all the silver to be lound. Mr. Hanau
57
paid as high as 5 per cent premium for Mexican dollars. They
exported their purchases to Europe. Finally our government got
onto the scheme and enacted the law of 1853, debasing our subsi¬
diary coins from 371% grains pure silver to the dollar to 347.22
grains, to prevent their further exportation, but it did not accom¬
plish all that was desired, as the exportation continued and silver
money became very scarce. It was afterwards found out that
Rothschild exported the silver to China and Japan, whose ports
had been a few years previously opened to the commerce of the
world, and silver in the beginning was 5 to 1. They made enor¬
mous profits out of our silver.
From 1848 10 1853 $93,313,498 net in silver was exported from
our country. (See mint director's report, 1895, page 295.)
From July 1, 1848, to July 1, 1857, the enormous sum of
$267,968,354 net in silver and gold was exported from our country.
Taking from the hanks their specie basis caused over 800 to fail,
and their bank notes to become worthless or greatly depreciated.
Thus the people were again placed in the sad predicament of being
left with little or no money. Rothschilds, not obtaining silver fast
enough, induced congress in 1857 to demonetize the foreign silver
coins that were in circulation among our people, which added fuel
to the fire and increased the frightful panic that was on them.
Demonetization of Silver.
The demonetization of silver was brought about by an act of
congress, passed on 12 February 1873. Our country was than in
the throes of a wide-spread, desolating financial panic, and a dark
pall hung over our land, caused by the enormous contraction of
the money volume. The gold and silver had been almost entirely
exported from our country ; only a small amount of gold remained,
which was held mainly by the fiscal agents of European bankers,
to sell to those of our merchants who had custom duties to pay,
which was required in gold coin. The circulation our people were
using was a limited amount of depreciated national bank notes,
and greenbacks. Our people were greatly in need of metalic
money, especially silver, to settle our heavy Asiatic balances for
teas, silks, etc ; also for internal trade. Our silver mines had just
begun to produce more largely of silver bullion, and some of it
was being coined into standard silver dollars under the coinage
law of 18 January 1837. From 1 July 1871 to 1 February 1873,
$2,532,336 standard silver dollars were coined at our mints from sil¬
ver bullion produced by our mines. If this coinage of standard
silver dollars had been allowed to continue, it would in a short
time have raised the dark cloud of despair that was then overhang¬
ing our country, and the financial panic that was crushing our
merchants would have soon been wiped out.
Silver bullion then was at a slight premium over gold. The
"Money Kings of Europe" wanted the price down to enable them
to make big profits in its export to Asiatic countries. The only
way to accomplish their object was to have the coinage of the stan¬
dard silver dollar stopped at the mint. The power behind the
throne went to work and accomplished the deed, called the crime
of 1873.
■58
"When the diabolical deed was found out and brought up before
Congress, no one would acknowledge having participated in the
foul work.
A publication showing up the transaction, made afterwards, pur¬
porting to have been obtained from an official, charged it against
August Belmont, fiscal agent of Rothschild, and then chairman of
the Democratic National Executive committee; Representative
Thomás Hooper, Senators Thomas F. Bayard and John Sherman
—all three leading lawyers in Congress. The work was successful,
silver bullion fell from $1.29 to now 67 cents per ounce.
The trade dollar, a bastard coin, legal tender {o the extent of
five dollars, was substituted for the standard silver dollar. It was
said to he intended for the China trade. Dr. Linderman, Director
of the mint, fixed the charge for coinage at IJ^ per cent. An in¬
side ring got control, and Instead of exporting the trade dollars
put most of them in circulation among our people, where they
were current near about par with gold. But a portion were ex¬
ported to China. This coinage kept the price of bullion from
matérially falling, which interfered with the interests of the
"Money Kings of Europe," consequently Senator Bayard intro¬
duced a hill in congress taking the legal tender value from the
trade-dollar, which was enacted into a law on 22 July 1876. Im¬
mediately after, the banks refused to receive them on deposits, and
our merchants and working people, who had received them at
par, were forced to sell them at a heavy loss, as so much silver
bullion. The bullion dealers bought them up. After a time a
law was enacted by congress directing their redemption at their
face value. Thus the law makes and unmakes money. After the
suspension of the coinage of the trade dollar, the price of silver
bullion began to fall. The "Money Kings of Europe" had accom¬
plished their object. The standard silver dollar contained 412)^
grains gross, and the trade dollar 420 grains gross. When the
coinage of the standard silver dollar was stopped, silver bullion
was worth about its coinage value, then why should a heavier
dollar have been substituted ? If the trade dollar was intended
for export, why was it permitted to have any legal value? Why
was it permitted to he put in circulation in our country ? The
inner ring that had control can answer those questions.
There was a foul taint to the entire transaction. Our people
were not benefited by the vicious laws. No, they have lost several
thousand million dollars through the demonetwation of silver.
Who has profited by the transaction ? European governments,
also the "Money Kings of Europe." Yet politicians will not undo
the fraudulent work unless the European governments consent,
when they know full well that so long as they can make big pro¬
fits out of the suspension of the coinage of silver, they never will
consent.
Senator Sherman, in his notable Columbus speech, further said :
"The bul passed both houses and became a law 12 February 1873,
by practically a unanimous vote of both parties, and was especially
supported and voted for by the senators and members from the
silver states. This has been called the 'crime of 1873,' and as the
bill was under my charge in the senate, I was held to be the chief
criminal."
59
Here we have it ! Senator Sherman openly and boldly admits
that the bill was under his charge in the sedate, therefore he must
assume all responsibility for the great wrong done, and the enor¬
mous losses resulting to our people from the passage of the ini-
quitious measure. He is the only member of congress who parti¬
cipated in its enactment, who has come out and acknowledged
being aware of its full purport, to drop the coinage of the standard
silver dollar and demonetize silver. Those who were members of
congress at the time of the passage of the law have over and over
again denounced it as a "fraud" ; also "doctored bill," and deny
having any knowledge of its intention to demonetize silver.
Here is what Senators Allison, Bogy, Morgan, Beck and Bright,
who were in the senate at the time of the passage of the law, have
had to say in the senate on the subject, after it was found out that
the bill suspended the coinage of the standard silver dollar and
demonetized si^er;
" Why the act of 1873, which forbids the coinage of the silver
dollar, was passed no one at this day can give a good reason,"—
(Senator Bogy of Missouri in ^Congressional Kecord, volume 4,
part 5, Forty-fourth congress, first session, page 4178.)
" Did the people demonetize silver? Never! It cannot even
he fairly said that congress did it. It was done in a corner darkly.
It was done at the instigation of the bondholders and other money
kings, who now with upturned eyes, deplore the wickedneae we
exhibit in asking the question even, Who did the great wrong
against the toiling millions of our people?"—(Senator Morgan in
Congressional Record, Dec. 12, 187?, page 144.)
" But when the secret history of this bill of 1873 comes to be
told, it will disclose the fact that the house of representatives
intended to coin both gold and silver, and intended to place both
metals upon the French relation instead of our own, which was
the true scientific position with reference to this subject in 1873,
but that the bill afterward was doctored, if I may use the term,
and I use it in no offensive sense, of course " * * » *
" I said I used the word in no offensive sense. It was changed
after the discussion, and the dollar of 420 grains was substituted
for it."—[Senator Allison in Congressional Record, volume 7, part
2, Forty-fifth congress, second session, page 1085 ]
"It [the bill demonetizing silver] never was understood by either
house of congress. 1 say that witfi full knowledge of the facts.
No newspaper reporter—and they are the most vigilant men I ever
saw in obtaining information—discovered that it had been done."
—[Senator Beck of Kentucky in Congressional Record, volume 7,
part 1, Forty-fifth congress, second session, page 260.]
" It passed by fraud in the house, never having been printed in
advance, being a substitute for the printed bill ; never having
been read at the clerk's desk, the reading having been dispensed
with by an impression that the bill made no material alteration in
the coinage laws ; it was passed without discussion, debate being
cut off by operation of the previous question. It was passed, to
my certain information, under such circumstances that the fraud
escaped the attention of some of the most watchful as well as the
ablest statesmen in congress at the time. • « * * Aye, sir, it
waS' a fraud that smells to heaven. It was a fraud that will stink
60
in the nose of posterity, and for which some persons must give
account in the day of retribution."—[Mr. Bright of Tennessee in
Congressional Record, vol. 7, part 1, second session, Forty-fifth
congress, page 584.1
Also read what Representatives Burchard, Holman and Cannon,
who were in the house when the law was enacted, have had to say
ill the house ;
"The coinage act of 1873, unaccompanied by any written report
upon the subject from any committee, and unknown to the mem¬
bers of congress, who without opposition allowed it to pass under
the belief, if not assurance, that it made no alteration in the value
of the current coins, changed the unit of value from silver to gold."
[Mr. Burchard of Illinois in Congressional Record, July 13, 1876,
page 584.]
**1 have before me the record of the proceedingp of this House
on the passage of that measure, which no man can read without
being convinced that the measure and the method of its passage
through this House was a colossal swindle. I assert that the
measure never had the sanction of this House, and it does not
now possess the moral force of law." [Mr. Holman of Indiana,'in
Co'ngressional Record, vol 4, part 6, Forty-fourth congress, first
session appendix, page 193.]
"This legislation was had in the Forty-second congress, Febru¬
ary 12,1873, by a bill to regulate the mints of the United Statès
and practically abolished silver as money by failing to provide for
the coinage of ihe silver dollar. It was not discussed, as shown by
the Record, and neither members of congress nor the people un¬
derstood the scooe of the legislation." [Joseph Cannon in Con-
grëssional Record, vol. 4, part6. Forty-fourth Congress, first session
appendix, page 193.]
Can any honest and candid man, after reading the above, other¬
wise than agree with Senator Allison "that the bill was doctored."
Or with Representative Holman "that the measure and the
method of its passage through the house was a colossal swindle?"
Both were in congress when the law was enacted, yet Senator
Allison lias continued to throw every obstacle in the way of the
passage of a free coinage bill by coiigress. To say the least, it
don't look well.
European Profits in Silver.
The treasury department reports that in 1895 silver bullion was
coined ,by 21 countries producing $100.069,000. Among those coun¬
tries which thus gained a profit of over 100 per cent were Great
Britian, France, Germany, Austria-Hungary and Russia. WiU
those countries which gain so largely between the commodity value
of the bullion and the coinage value, ever consent to international
bimetalism? Hardly possible!
International Agreement Impossible.
Here is from the American Banker :
"Henry W. Cannon, president of Chase National Bank of New
York, and who was a member of the Brussels Conference, before
the recent meeting erf the Commercial Club of Providence, R. I.',
61
said : "While the declarations and statements made by the diflfer-
ent delegates to the conference from the several countries represent¬
ed are of the greatest importance and value to the people of the
United States in their consideration of the silver question, nothing
definite was accomplished, and we are forced to the conclusion,
from what transpired, that an international bi-metalic union can¬
not be formed nor an international bi-metalic agreement fixing the
ratio between gold and silver entered into unless a great change
occurs in the sentiment of Great Britain, whose position in the con¬
ference is indicated by a statement of Sir Rivers Wilson, who de¬
clared ; 'Our faith is that of the school of mono-metalism pure
and simple. We do not admit that any other system than a single
gold standard would be applicable to our country.' This has re¬
cently been confirmed by the utterances of Mr. Gladstone in Par¬
liament. Upon the action of England apparently depends the ac¬
tion of the majority of other countries."
Mr. G. C. Gornwell, president of the Gity Bank of Buflfalo, says :
" Let me say one thing further; if you read carefully the delibera¬
tions of the Brussels Gonference, the very last international ex¬
pression on this subject, you will be thoroughly convinced of the
impossibility of getting governments together on bimetalism. The
positive refusals of the gold-standard nations to even consider inter¬
national bimetalism places the matter entirely out of reach."
The people of the United States have waited most patiently for
23 long years for congress to restore the free coinage of silver bul¬
lion and thus bring it to a parity with gold bullion, and blot out
the crime of 1873 from the statutes ; but Ambassador Bayard and
Senators Sherman and Allison, who were in the senate at the
time the deed was done, plead that our people should wait until
Great Britian consents !
Our government has sufficient power and wealth to sustain its
own financial system ; then why wait for years and dally with in¬
terested European governments to consent? "Money Kings of
Europe" have bound our people with shackles. We should burst
them assunder and cast them off.
The House of Rothschild-A Rich Family.
London press reports place the wealth of the Rothschild family
at $2,000,000,000. There is in fact but one ruler in Europe and
his name is Rothschild. The several nations of Europe owe
collectively about $60,000,000,000. Near one thirtieth of this is
held by the Rothschilds."
In December, 1890, the following was published : " The story
told in a leading Eastern paper, to the effect that the Baring
Brothers were put in a critical position by the machinations of the
rival bouse of the Rothschilds, who induced the Russian Govern¬
ment to suddenly withdraw a deposit of £5,000,000 sterling from
the Barings, a good deal of admiration over the unselfish course
of the great English financiers has been wasted. It is true that
the Rothschilds came to the relief of the Barings, but it is pro¬
bable that they did not make a move in that direction until they
saw signs that they might suffer in the crash which they helped to
bring about. The more the recent crisis is studied, the more
62
reason there is for believing that English financial methods are
very rotten, and that the country, owing to the enormous expan¬
sion of the credit system, is constantly on the brink of disaster."
The Bothschilds have a private mint and coin money for
governments, and have coined largely for Russia.
"Richest man in Germany, is Bleicbroeder of the Rothschild
banking house. When Rothschild went to Berlin in 1829 to seek
an agent for his world renowned house," says the Chicago Dispatch,
"he was led almost by accident to a small bank in a side street, pre¬
sided over by Bleicbroeder. The hank had been establishea in
1803, but had played no part in the financial history of the country.
But the financier was pleased with the apparent abilities of the
modest banker, and chose him as his representative in preference
to others of greater pretensions and fame. The selection was the
foundation of the success of the house of Bleicbroeder. No one
could talk to the banker without hearing several times in the course
of the conversation: 'Yes, it is little wonder, when one stood
twenty-five years behind the chair of the man who ruled Europe.' "
This great influence with Bismarck accounts for the suspension of
coinage of silver by Germany in 1871.
"President Cleveland, in going to the representative of the
Rothschilds for financial help for this government, has followed an
ancient precedent. It is the business of the Rothschilds to help
out (for a consideration) nations whoso rulers, by their folly or in¬
competence, have plunged them into financial distress. In that
business they have become the richest and most powerful family
in the world. ,
"The house with which Mr. Cleveland did business is the Lon¬
don branch of the Rothschilds, through its New York agent, Mr.
Belmont. Mr. Belmont is of the same race as hie principals, and
like them, too, is of a family that has changed its name. When
the first Belmont came to New York his name was Schoenberg,
which is the Geiman equivalent of Belmont (beautiful mountain).
This name in turn was probably assumed at that critical time in
the history of the Jews in Europe when they were given the hard
choice of purchasing fine names or assuming ugly ones of their
enemies'' choosing. The Rothschilds' name was Bauer. The
newer title was assumed by Mayer Anselm-Bauer, the first of the
great bankers. It suits the emblem of the family, 'Red Shield.'
IN POLITICS.
"A French writer says of the later history of the House : 'The
financial power of the Rothschilds has recently been combined
with a political power which, though not publicly proclaimed, is
none the less effective. Nathan IMayer understood the interest
which he had in keeping always informed in advance of his com¬
petitors and even of Cabinets regarding financial and political ev¬
ents which might have an influence on his speculations.' ' — S. F.
Bulletin.
"It is a very curious circumstance with reference to silver that
the more we try to increase its value the lower it goes. There can¬
not be much dbnbt that some artificial factor is in operation, else
puch a result would be wholly impossible. There is at the same
time an organization of some sort in London of which there is
63
little or no knowledge, doing all it can to 'bear' the metal. It is
also signiflcant in this connection that the silver market, as a rule,
exhibits signs of weakness whenever it is proposed to do anything
further on th^s side of the water for its benefit. There seems to be
a persistent purpose on the part of some powerful organization
somewhere to depress the white riietal. Perhaps, when the bot¬
tom facts are investigated there willl not be a great deal of trouble
in determining what the organization is."—Bulletin.
The "Money Kings of Europe" is the power that rules silver bul¬
lion, also copper.
Note.—I see it is stated as a fact that the market price of silver
is fixed every day in London hy a few brokers of whom Roths¬
childs & Co. are the chief. This price is telegraphed all over the
world. What these half dozen unknown, irresponsible persons
choose to say is the market price of silver, actually fixes the price at
which hundreds of millions of toilers all the world over shall take
for their produce.
"It is not wise for a little present gain to hand over to the
money lenders of Europe the shaping of out foreign and domestic
jwlicy. Time and again within the last two years Congress has
been warned as to the consequences that would follow certain pro¬
posed legislation. We are told not to consider the interests of
our own people by legislation to remonetize silver, because _we are
not prepared to purchase all of our securities that might be
thrown upon the market. The threat is not an idle one. While
no one knows the exact amount of our indebtedness, a roogh
estimate places it at $3,000,000,000. This is about the s^ of the
club that is held over our people wlien we talk about doing some¬
thing our creditors do not want us to do. Napoleon never came
so near being a master of Europe as European money lenders are
now to being masters of the civilized world."
Secretary of state for India is the imperial being who rules the
silver market of India. It is the currency conditions and the in¬
debtedness of its government which today dominates the silver
market ; and yet while these conditions form the very clue to the
silver puzzle, how few of the leader writers for the Eastern
press, who denounce so glibly the lobby malpractices of the so-
called 'silver king' across the water who sells year by year more
silver than is produced by all the mines in the United States ! The
government of India is in this position—India has borrowed im¬
mense sums in England, the interest payable in gold, for railways,
for frontier defenses and for other public works—so that includ¬
ing her remittances for official pension, the-"home charges" of
the Indian government amount to some $16,000,000 a year. So
that while the entire revenues of India are collectable in silver
rupees, this vast "tribute" is a fixed gold obligation. Hence it
happens that of the rupees in the Indian treasuries, enough have
to be sold to realize $16,000,000 in gold, in other words, is obliged
to sell yearly some 90,000,000 ounces of silver. And he sells his
rupees weekly in the Bank of England to the highest bidder ; he
sells, not indeed rupees, but orders to draw rupees ; these are the
"Indian Council Drafts." And these drafts are bought by Euro¬
pean merchants, who are importers of wheat, cotton, maize, jute
64
and rice from India and who require to pay rupees in India for the
produce they are importing. American silver bullion must con¬
form to the Bank of England prices for rupees. It is these smash-
sales of more than 1,500,000 ounces of silver per week which con¬
trol all the world over the price of the metal, and thus it happens
that the silver bullion market today is more helplessly under the
control of the buyer than is the meat market of Chicago at the
mercy of the Big Four.
British India made its bonded debts payable in gold coin, in lieu
of the silver rupee, and thus discredited it as legal tender money
to pay debts, which forced it to be sold as bullion; just as Mexico
did in making the largest share of its debts payable in gold, thus
discrediting its silver dollars and forcing their sale as bullion, and
just as the United Stales did when it declared that the greenback
should nut pay custom duties, and thus forced our merchants to
sell them at a heavy discount for gold coin to make their pay¬
ments.
The present administration of our government is bent upon
making its bonded debt payable in gold coin and making gold coin
the basis for redemption of all other money. If successful, a large
depreciation in the value of greenbacks, national bank notes and-
silver coin under the par value of 100 cents in the gold dollar will
surely follow.
Enormous Demand For Silver Coinage.
Extracts from an article in the N. Y. Herald, under the heading,
"Silver bullion for China." "There is a big scheme on foot to fur¬
nish China with the necessary silver bullion for paying off the war
indemnity of 200,000,000 taels to Japan. Prominent Americana,
and possibly Englishmen, will take a hand in it. There might
have been big profits in such a scheme, but the Japanese were not
so stupid as to allow the indemnity to be paid in so many taels,
but they specified,it is said, that it should amount to so many taels'
worth of bullion, which amounts to double.
"This spoils the chance for a really big deal. The proposed Chin¬
ese loan will be on a gold basis, and after it has been arranged
and the money obtained thereby, China will be free to buy silver
wherever she chooses and have it delivered as Japan directs. It
is believed by foreign bankers in New York that a very large part
of the silver will be drawn from this country."
There is no douht but there exists a syndicate with a big scheme
to grab the $120,000,000 silver bullion in the Ü. S. treasury, bought
under the law of 14 July 1890, as evidence the repeated urging of
late of its sale. Secretary Morton urged Secretary Carlisle to "sell
it as so much scrap iron lying in the treasury."
Ex-Senator John B. Henderson, a leading lawyer of St. Louis,
at the request of Secretary Carlisle, gave his views on the financial
question through the press. In his second proposition he urged,
"the silver bullion in the government's vaults should at once be
sold for cash in gold."
George Augustus Haig, in a letter of May 30, 1893, states thu^:
"I would recommend the U. S. government to ofier to supply the
British government with 120,000,000 ounces of pure silver at 90
65
cents per ounce. It will sugar the pill and make it more easily
swallowed. You have plenty of silver bought a long way below 90
cents, so you would make money by the transaction."
Ex-Secretary Manning, Edward Atkinson and others have urged
its sale.
The schemes of 1873 and 1893 show who the power is behind
the throne. Once it has been agreed upon to sell, the price can be
lowered from 90 cents to the present market price, 67 cents. Who
is it that can command such an enormous amount of gold ; that can
pay down the cash at once for the 120,000,000 ounces ot silver bul¬
lion at 90 cents per ounce ? There are millions in it.
Under the heading, "The Future of Silver," the Atlanta Consti¬
tution of January 20, 1894, said: "According to a recent writer on
the subject, China and India, in another ten years, at their
present rate of progress, will require a per capita circulation as
large as ours, and as they will never give up silver, it is a reason¬
able estimate to say that China will require $10,000,090,000 in
silver, while India will need $7,800,000,000. Now, if the world's
silver output reaches $200,000,000 a year it would take ninety-one
years to produce enough to answer the needs of India and China."
Following is a special dispatch to the San Francisco Chronicle,
July 25,1896 : " A cable to the World from London says : Li Hung
Chang at Paris said : ' I am very greatly interested in the question
of silver, and have had some articles on the controversy in your
country translated and read to me. You know that we have no
coinage in China. Well, I am going to introduce it immediately.
It will be all silver. We shall be silver mono-metalists. China's
population is upward of 400,000,000. Her foreign debt is esti¬
mated at $45,000,000, mostly silver loans. Another large loan is
about to be negotiated.' "
The London Central News's correspondent in Madrid, Spain,
sends this dispatch : " A sensation has been caused by the dis¬
covery that 24,000,000 spurious Spanish silver dollars are in
circulation. The coins are of the full mint weight; many are
even slightly superior to the standard. The authorized dollar has
a face value of 5 pesetas and an intrinsic value of about 21^
pesetas. Hence the coiners of full weight dollars can make a high
profit. The Spanish officials say that the dollars are produced in
France and America. Certain bankers here are suspected of com¬
plicity in the distribution of them."
" Sir Morton Frewen reports that large numbers of U. S. stiver
dollars'are in circulation in the Straits Settlements, and has an
idea that they are being coined by some banking firm in London."
Folly of Monometalism.
Philadelphia, Dec. 22,1892.
Editor of the Manufacturer; Your views on the silver quescion
are, in every respect, perfectly correct—and I say this from an ex¬
perience of over fifty years in the banking business.
Our statesmen and the press, generally, are woefulljr blind to
the effect this opposition to the remonetization of silver is having
66
on our country's prosperity, to say nothing of what is greater, its
effect upon the whole world.
It seems inconceivable that when the world is increasing so
rapidly in population, in development of every kind, in railroads,
manufacturing, and the opening of vast agricultural regions, that
the business of this world, by a mere arbitrary decree, should be
reduced to a condition of reliance upon gold only, as a measure of
values ; and, then, in my opinion, we have not yet begun to feel
the full weight of this foolish and absurd attempt to bring the
world to conform to monometalism.
The demonetization of silver in 1873, although a measure
enacted ignorantly, confessed by congress, was a great crime to
civilization and progress ; and, further, the vast majority of the
people, who are not capitalÍBts,have been reduced in resources and
in debt-paying capacity to the full extent of the withdrawal of the
legal tender silver money.
It is almost laughable, were it not so serious, to read the edi¬
torials in the daily press of the country, which are in a great ma¬
jority averse to the upholding of silver and restoring it to the basis
of 16 to 1, and to its former position as a legal tender, debt-paying
metal.
Silver, for all time, has held a place far above that of gold in the
money transactions of the world. Amongst at least two-thirds of
the population of the world it is now the sole currency. Now in
the fullness of time, when the world is full of activities and de¬
velopment, instead of making a legal tender basis of silver and
gold each, the wiseacres of this day have deliberately destroyed
one half of this necessary basis. Was there ever anything so fnll
of folly ?
The newspapers seem to be doing all they can to create a panic
by declaring that the further buying of silver will expel the gold
from the United States treasury, and from this country, which is
a silly prognostication. It has no foundation whatever in fact, or in
the experience of those who have watched the course of events
in the past.
Hoping that you will continue to battle as you have done in the
past, namely, for the right, I am sincerely your friend and well-
wisher, Jay Cooke.
Mono-Gold Standard a Stepping Stone to Anarchy.
Here is what the most eminent financier that has lived in this
country had to say in regard to silver coinage: "A paper from
John Thompson, Vice-President of the Chase National Bank of
New York, was then read as follows : 'With the demonetization
of silver began an era of contraction not perhaps shown by the ag¬
gregate figures of outstanding currency, but by a disproportion bet¬
ween the increase of currency and the business of the country,
which has increased out of all proportion to the growth of our circu¬
lating medium. Our working currency consists of legal tender notes,
national bank notes, silver coin and silver certificates. The latter
do not now increase as fast as the national bank notes are retired.
Therefore it can be truthfully said that the stock of currency that
does the work of the country is slowly but surely diminishing,
67
while the business demands upon it are constantly increasing.
There have been two influences at work tending to increase the
measuring power of money in the United States, and there has
been a consequent depreciation of property. The one was the gen¬
eral effect of the demonetization of silver, and the other the con¬
traction of the particular kind of currency used, while our dollars
are of silver and silver certificates are based upon them. So far
both these dollars and their representatives have been restricted
in amount and kept on a gold basis by a policy that has favored a
gold mono-metalic standard. The demonetization of silver has been
and is a wicked preference given to the creditor over the debtor
classes of our entire population, and it is this preference that is
driving our middle classes into poverty and enabling millionaires
to multiply their millions. Nothing in my opinion, will save our
people from social revolution so surely as a full remonetization of
silver and giving it all the advantages we are now giving to gold,
both in law and in the ruling of our treasury department. A mo¬
no-gold standard is the stepping stone to anarchy. Nay, it is more ;
it is a flight of stairs leading from the Chamber of Commerce to
bankruptcy, panics, suicide, repudiation, agratianism and univer¬
sal poverty among all real wealth producers, for whose welfare
the best minds, best statesmanship, and best representatives of all
legitimate business interests should ever be enlisted.' "
Great Benefits from Free Coinage of Silver.
As stated before, the benefits that would come to the people
through the free coinage of silver bullion at 16 to 1 would be
many and immense ;
1. It would cause silver bullion to advance immediately from
its commercial value of 67 cents per ounce to the legal tender or
coinage value of $1.2!) per ounce, and thereafter to remain per¬
manently on an equality in value with gold bullion.
2. It would cause the opening of many new silver mines, the
re-opening of maiv abandoned mines—closed owing to the low
price of the bullion—also the active and rapid development of all
silver mines—also many gold mines that do not under present
conditions pay to work on account of the low price of the silver
and other metals taken out of them.
3. It would cause the active working of many lead, iron and
coal mines, also lime quarries, as all these products are used very
largely in producing silver bullion, also in smelting the ores.
4. It would bring about an immense demand for all kinds of
machinery and cause very active work in all foundries and ma¬
chine shops.
5. It would create an immense demand for all products of th»
ocean, garden, orchard and farm; also of canneries, manufactories
of shoes, hats, clothing, millinery goods, rubber goods, electrical
products, powder, dynamite—and in fact everything that is used
or consumed by mankind. Silver miners are the most liberal and
generous consumers in proportion to their income of any class;
besides, they are prompt and good pay.
6. It would create an immense demand for wood and lumber.
68
as both are used very largely in mining and by miners in building
homes, etc.
7. It would put to work in a brief period at least 300,000 persons
in the mines and different branches of business incidental to the
this activity in mining, that are now idle. In fact, one can scarcely
imagine what would be the activity of its ramifications.
8. It ^i'ould bring into generous consumption all the newly em¬
ployed and those dependent upon them, probably 2,000,000 per¬
sons—also all persons in employment, through increased salaries
and wages resulting from the great activity that will come in all
business.
9. It would largely benefit schools and all institutions of learn¬
ing, as well as the churches—through full and active employment
of the people at the increased salaries and wages.
10. It would immensely benefit all the railroads, steamers,ships
and all crafts, in the heavy addition to- transportation of pass¬
engers and freight, resulting from the prosperous times silver
coinage would bring.
11. It would cause the silver coin of all countries of equal
standard to our silver dollar, to advance to parj that is, on a
parity with the gold dollar. The rupee of British India would ad¬
vance to par, and with it British India exchange, which is based
upon silver bullion ; also East India wheat and cotton would ad¬
vance in about the same ratio with silver bullion. The Mexican
dollar and the yen of Japan, would advance to par, and those
countries would not thereafter have such a decided advantage in
exporting their products into our country. Cheap silver bullion
now acts as a bounty of 100 per cent to those countries. For in¬
stance, the orchardist of Mexico ships his lemons to San Francisco
and sell them for three dollars per box in gold coin, which he
sells at home to importers for six Mexican dollars, which he pays
for the labor and products of his country.
12. It would immensely increase our trade with"Mexico, a\po
Central and South American countries, which produce silver
bullion and use silver coin as money, most of which countries now
trade with European merchants.
13. It would immensely enlarge the value of our exports to
European and Asiatic countries, as the quantity now sent abroad
would have a largely increased value over present quantities ex¬
ported. Wheat shipped now from New York, worth 65 cents per
bushel, would command from $1.10 to $1.15; and cotton that is
now worth only 8 cents per pound in New York would bring II to
12 cents per pound.
14. It would immensely benefit the people of all countries that
use depreciated silver coin mainly in their transactions, through
the large increase in value of their coins to par, as they would re¬
ceive a far larger quantity of products for their money. Mexico
and all South American countries which produce largely of silver
bullion would be immensely benefited through the great activity
in the working of all their mines and the very large increase of
money resulting from its use.
15. It would immensely benefit our shipping interests^ through
the increased value of the products and the large increase in trans¬
portation of passengers and freight.
69
16. It would largely increase the product of gold in our country,
as two-fifths of all our gold comes out of silver mines ; also largely
increase the product of silver bullion through the great activity in
working of the increased number of silver and gold mines.
17. It would enable our merchants dealing with Asiatics, to
settle their enormous balances owing for teas, silks, spices, rice,
etc., of about $85,000,000 per annum in silver bullion permanently
at about $1.29 per ounce, its legal tender or coinage value—in lieu
of its fluctuating commodity value, now 67 cents per ounce. For 23
years silver bull ion has been tumbling in price, causing heavy
losses to our importers. The merchant who bought the cheapest
bullion had the best bargain over his neighbor. Last year silver
bullion which could have been coined into $60,000,000
was exported at its commodity value of 68
cents per ounce, a loss of about ' $30,000,000 to our
people. The Asiatics will in a few years make an enormous
demand for silver bullion for coinage, also the arts.
18. It would largely increase the volume of money through the
largely increased out-put of the large increase in mining of both
gold and silver—and this large increase in the volume of money
would bring general prosperity and largely benefit every business
in the country,
19. It would largely increase salaries and wages of all persons
working in or about silver or gold mines, and in all other business
benefitted by the increased working of all mines, also benefitted
by the increased volume in money coming from mining.
20. It would cause a large increase in the consumption of silver
bullion in the arts, as the manufactured silver would have a per¬
manent coinage value, which would make investments in such
products safe and desirable.
21. It would start actively railroad building through the mining
and agricultural sections, to afford facilities arising from the great
activity in aad large increase in all kinds of mining.
22. It would cause an immense demand for all products,through
an increased demand for generous consumption, created by act¬
ivity in employment, and thus force prices of all products to ad¬
vance.
23. It would create an active demand for lands and farm property,
caused by the profits arising in farming from the increased value of
all farm products.
24. It would create an active demand for all village, town and city
property, from the improved condition of all the people, who would
then be buying instead of selling out their homes.
25. It would start up largely and actively railroad, ship, factory,
store and house building, through the improved condition brought
about by the immense increase in mining in all kinds of minerals,
by being enabled todo so by the largely increased volume of money
coming out of the great number of mines.
26. It would make much easier the collection of debts, through
the improved condition of the people by the enhanced value in pro¬
ducts and property, also by the largely increased money volume,
and stop foreclosures.
27. It would, through «the enhanced value of silver bullion to
its coinage value, stop the surreptitious coining of silver bullion.
70
Mexican silver doJlars and Japanese silver yens into U.S. standard
silver dollars, which is being done very largely, and thus make
counterfeiting unprofitable. Counterfeiters' profits would cease.
28. It would restore confidence and convince the people that
there is more honesty among one another.
29. It would, through the large increase in the volume of money,
largely increase the deposits in the. banks, which would relieve
them from their present strain and embarrassed condition, also
enable them to increase their loans, facilitate collections, and
make banking more profitable than now.
30. It would greatly relieve manufacturers and merchants,
through an enlarged business from the enlarged consumption, also
from being enabled to procure loans from banks without being re¬
quired to give "all the world" for security—and render business
profitable.
31. It would stop the issuing of bonds by our govemment,al80
enable our government to begin again paying off its indebtedness,
through the large increase in its revenues, resulting from the im¬
proved and largely enlarged business of the country.
32. It would make the great masses of the people—who are
now sad and careworn—prosperous, contented and happy, occasion¬
ed by their improved condition and prosperity.
Value of Standard Silver Dollars.
Our silver dollars are now on a parity with our gold dollars ;
that is, each dollar is worth 100 cents, no more, no less. No silver
dollar nor silver certificate has ever been redeemed at the U. S. treas¬
ury in gold coin. The par value of the silver dollars and silver certi¬
ficates have been maintained solely by their debt-paying power, but
to maintain this parity permanently, each must have equal debt-
paying power, and all contracts for the payment of debts in speci¬
fic money (gold) be prohibited. If all debts be made payable in
gold coin, then the silver and the paper dollars will become depre¬
ciated through their insufficiency of debt-paying power, and peo¬
ple will suffer great losses and inconvenience ; in fact, it would
drive gold out of circulation. The gold supply in our country is
wholly inadequate for a basis to sustain the paper and silver coin.
It is against public policy to allow contracts for payment of debts
in gold coin, as it tends to discredit and render at a discount the
silver coin and paper money, and brings confusion.
Our Foreign Debt.
Here is an estimate of our annual indebtedness to Europeans :
"In the Forum, Mr. Heidelbach, a prominent New York foreign
banking house, a heavy exporter of gold, gives the amount of the
annual indebt^ness of the United States to Europe about as
follows ;
71
Money spent by Americans abroad.. $100,000,000
Freight carried in foreign ships 100,000,000
Dividends and interest on U. S. se¬
curities held abroad 75,000,000
Profits of foreign corporations doing
businesss here 75,000,000
Total $350,000,000
" The American Banker states that Mr. J. W. Cross, a IiOn4Ph
banker, estimated the amount at $325,0Q0,000 annually."
Decrease of Money.
Previous to 1887, most every business was prospérons. Then
Europeans invested largely of their incomes in ca,ttle ranches,
flour mills, farms, railroad stocks and bonds. Early in 1888 titpes
began to grow hard, caused by the contraction of the national
bank note circulation, which bank notes were largely withdravro
from circulation and destroyed. All products began to tumble in
price, and business became unprofitable. Then Europeans largely
stopped investing, and called home their incomes ii; gold. Since
July 1,1888, up to 1 August 1896, $332,887,320 net gold has been
exported, thus creating a further contraction of the circulation, and
causing gold to become much scarcer through exportation, also
through hoarding from a lack of confidence. The loss of confi¬
dence occasioned by the shrinkage in the volume of money has
caused a distrust in, and a run on, the banks by depositors, which
has necessitated the banks to largely call in their loans, which is
forcing the sale of property at a heavy depreciation and causing
'bankruptcies to increase, and may bring on a very severe crisis
similar to 1873. If the banks were on a gold basis in lieu of a
greenback basis, which they are on at present, it would prove as
terrible to the banking and mercantile interests, also to the work¬
ing class, as was that of 1837.
Take the treasurer's late report upon the volume of money in cir¬
culation at respective dates, and see the falling oflf of money :
June 30,1894 $1,660,808,708
June 30 1896 1,506,631,026
Withdrawn from circulation $ 154,177,681
This statement, coming from the treasurer, shows that about
■one-tenth of all the money in circulation among our people about
two years ago, has disappeared from the channels of trade. Yes,
taken away from the uses of the people, from being deposited in
the banks and paying debts. Is it any wonder the merchants are
complaining about the growing hard times, increasing bankruptcy,
depreciation of property, run on the banks, loans being called in,
and further loaning stopped ?
Why does this grievous condition exist? "Dyed-in-the-wool
îlepublicans " declare it is all owing to the low tariflF. " Gold
Democrats" insist that it is because "there has been too mu(Â
72
silver bullion coined." ''Blind men" allege, "over-production."
Present prices do not pay for gathering hops, gathering and
curing lemons, picking and drying grapes for raisins. Prices of
bops are higher in London than in New York. Would
a raise in duties bring up prices, while prices are higher in foreign
countries? Wool will not much more than pay for shearing and
sacking—prices are higher in London than in Boston—would a
duty of ten cents a pound bring up prices ?
Bigid economy among the people all over the land has caused
prices to fall.
Generous consumption among the people only will raise prices.
A large increase in the volume of money will put all the people
actively to work, and thereby create a very liberal consumption of
all products, and force prices up.
The free coinage of silver bullion at 16 to 1 will produce the
money that will work the wonderful change.
An opportunity for monetary reform is now offered the people,
which comes only once in a life time. Don't wait longer for Eu¬
rope, but all voters rush to the rescue ! Otherwise, unless some¬
thing providential happens, our country will be wrecked.
JESSE GILLMORE.
San Dingo, Calif., Sep. 1,1896.
332.0973
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