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DEBT AND CURRENCY.
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IS. OUR PROSPERITY A DELUSION ?
OTUIF,
NATIONAL DE BT
A N ID
CUT F. E. E. N. C. Y.
BY A BOSTON MERCHANT.
arż. fŻózzāv
P O S T O N :
A. WILLIAMS & C O ...,
1864.
Press of GEO. C. RAND & AvKRY, 3 Cornhill.
P. R. E. F. A. C. E.
THE prevalence of erroneous impressions rela-
tive to our real condition, the tendency of which
is to encourage general extravagance, excessive
importations, and a prolongation of the war, has
induced me to give expression in the following
pages to a few thoughts upon the subject, based,
as I believe, upon right principles, for the pur-
pose of correcting popular misapprehension, and
arousing the public mind to the consideration of
the actual condition of our affairs, the right
appreciation of which is so essential to our pros-
perity as a nation.
In speaking of the North, says Mr. Cobden :
“They are mistaken if they think they can carry
on a civil war like this, drawing a million of men
from productive industry, to be engaged in the pro-
cesses of destruction, — to spend $1,500,000,000,
—they are deluded if they think they can carry
on a war like that without a terrible collapse
sooner or later, and a dreadful prostration in
every part of the community.”
A. W. S.
C O N T E N T S.
SECTION
w 1.
2.
General impressions relating to prosperity.
These popular impressions one reason why the war is not prose-
cuted with more vigor.
. This so-called prosperity a delusion.
Illusive prosperity generally precedes misfortune.
5. Correction of popular errors.
*6.
10.
11
12.
13.
14.
*
15.
16.
17.
18.
19.
20.
21
22.
23
24
25.
26
True elements of prosperity.
An examination of our material prosperity.
. Government consumption destructive of capital.
. Productive employment of capital essential to real prosperity.
Some elements of illusive prosperity.
The delusive character of these elements. Af
Enormous expenditures the main-spring of industrial activity.
A new element in political economy.
When industry is the offspring of debt, the community cannot be
considered prosperous.
A speedy and successful termination of the war the only security
for prosperity.
Blindness to our real condition is not the result of industrial activ-
ity alone.
Consideration of national debt and currency.
National debt contracted without the reception of an adequate value.
Erroneous impressions relative to paper money.
Present issues of paper money, and debt.
Character of a paper currency. *
Operation and effects of money. *
Liability of paper to depreciate. ~ \
Gold and silver, recognized standards of value.
How to prevent depreciation of paper.
Instability of paper currency.
8
SECTION
27. Increase of money and enhanced prices no evidence of augmented
wealth or value.
28. Some evidences of the depreciation of money.
29. Only two methods of depreciation.
30. Over-issue of paper a direct cause of enhanced prices.
31. The volume of currency increased, its value becomes diminished.
32. Views of Secretary Chase.
33. The Hom. Secretary very inconsistent.
34. Bank issues not the originating cause of a depreciated currency.
35. The large over-issue has proceeded from the Government.
36. Contraction of issues would increase and expansion decrease the
value of the currency. tº
37. Suppression of all bank circulation desirable.
38. Reduction of the currency the only way of return to the “normal
condition of prices and business.”
39. Price of gold, and ratio of depreciation.
40. Other causes besides depreciation enhance prices.
41. Those causes operate universally, but in the United States are al-
lied with a depreciated currency.
42. Effects of enhanced prices as seen in the clearing houses of New
York and Boston.
43. The volume of currency increased, all commodities bear their pro-
portion of the “augmented mass.”
44. Over-issue of paper an expensive undertaking, and burdensome to
Government and people.
45. Insatiable demand for more.
46. An additional issue disastrous.
47. Public welfare demands a contraction.
48. The method to accomplish it.
49. Stability of value craved by the people.
50. Issue of legal tender a fearful responsibility.
51. Immense power of the Secretary of the Treasury.
52. Our apparent prosperity an illusion.
53.
In extricating ourselves from this abnormal condition, we shall
discover our real position. 9.
ARE WE PROSPEROUS ]
SECTION 1. Throughout the loyal States
the hum of human industry is heard, labor
is fully employed, human skill and ingenuity
are opening new channels of production,
new schemes and enterprises are constantly
brought forward and prosecuted with ener-
gy, trade is active, and money plenty; and,
everywhere, in the marts of trade, in the
legislative hall, at the stock exchange, and
the political gathering, are heard rejoicings
over our prosperity.
Remote from the scene of conflict between
contending armies, ignorant of the horrors
of war, and experiencing but little inconven-
2
10
ience, and, as we think, large, profits from its
destructive powers, we are living happily
under the impression that we are “prosper-
ous,” and are, to an alarming extent, indiffer-
ent respecting its speedy and successful
termination.
2. Our so-called “prosperity” has had
the effect to draw off our attention, al-
lay our excitement, quiet our fears, and
stupefy our sensibilities relative to the great
conflict in which we are engaged; and the
principal reason why men do not volunteer
with alacrity is because of this delusive pros-
perity which abounds at home. There is
no want of able-bodied men, for our streets
are filled with them; but it is because
neighbors, friends, and companions are sup-
posed to be making their fortunes by spec-
ulations, or because labor is completely
supplied with steady employment and high
wages, that even the heavy bounties pro-
vided do not offer sufficient inducements
11
for men to enter the service. Thus it is
that this nominal prosperity, which is to
a great extent the product of the war, is
the proximate cause why war languishes
for want of men to fill up its armies.
3. It appears to me, however, that this
“prosperity” is to a great extent a popular
delusion, that it rests upon a fictitious basis,
and although presenting to the public mind
a specious and plausible appearance when
clothed in its “glittering generalities,” it is
nevertheless imaginary rather than real,
and illusive rather than actual Believing
thus, and entertaining the conviction that
the only way to secure prosperity, is by
securing the speedy and successful termi-
nation of the war, it seems desirable that
some effort should be made to check the
spread of this popular error, and bring the
public mind to a more correct appreciation
of our true condition.
4. Apparent prosperity generally pre-
12
cedes disaster. In our own history we have
experienced severe monetary disasters, the
most, if not all of which have been imme-
diately preceded by great apparent pros-
perity, the sequel of which proved conclu-
sively that our nominal prosperity was, to
a considerable extent, a phantom, as it re-
sulted in disaster to thousands who were
deceived by its pretentious appearance.
5. In attempting to correct a popular
error, I am aware I have a difficult task
to perform; for popularisms, when they are
supported by so many superficial appear-
ances, and harmonize so beautifully with
our feelings and desires, are with great
difficulty overthrown. I approach the sub-
ject, therefore, reluctantly. So general is
the belief in “our prosperity,” its super-
ficial appearances are so fascinating and
bewildering, that it seems almost unkind
to disturb the tranquil course of thought
by endeavoring to look beneath the surface.
13
6. In what does true prosperity consist?
A short and, I believe, a correct answer is,
in the productive employment of labor.
For it is by the labor of the people that all
subsist, and, when that labor is actively and
productively employed, when the capital
and skill of the nation are united with the
industry of the country in acquiring the
greatest possible amount of produce, then
it is that the nation may be said to be
truly prosperous, and to become wealthy
to the extent of its surplus products. Con-
versely, it must be admitted that, when a
large proportion of people are non-pro-
ducers, and another large proportion are
engaged in unproductive employments,
that people cannot be said to be truly
prosperous, as it is by the unproductiveness
of labor that nations decay.
In dealing with this question, I wish to
abstract it from all political relations and
associations, and view it, so far as it relates
2*
14
to the wealth and productive prosperity of
the country. It is, therefore, material and
not political prosperity which we are to
examine.
7. According to common report we
have nearly one million men in the service
of the government. These men, with
thousands of office-holders, are non-pro-
ducers, and the value of their labor is an
absolute loss of productive capital to the
country. Then, we have nearly a million
engaged in unproductive employments, or,
in other words, the manufacture of the
materials of war, which is like the complete
destruction of so much capital, as far as
any increase of wealth is concerned.
Says J. S. Mill, “By unproductive labor
will be understood labor which does not
terminate in the creation of material
wealth; which, however largely or success-
fully practised, does not render the commu-
nity, and the world at large, richer in mate-
15
}
rial products, but poorer by all that is con-
sumed by the laborers while so employed.”
Our immense armies are therefore not
only non-producers, but are destroyers and
consumers of the capital of the country.
And, while other labor produces more than
it consumes, these classes produce compara-
tively nothing, involving a loss to the coun-
try, not only of the productive labor of
these large classes, but also the losses which
arise from waste and destruction of mate-
rial incident to war.
A vast amount of real capital or wealth
is thus withdrawn from productive employ-
ments, and annihilated. A value is thereby
taken from the community without its
receiving any in return, and that value is
destroyed.
8. Government consumption, therefore,
unless spent upon internal improvements,
or other useful objects, is destructive of
capital, and differs entirely in its character
16
from the consumption of the community;
for, in the community, the consumer repro-
duces by his labor more than he destroys,
whereas, the government being a con-
Sumer and a non-producer, extinguishes
the capital it consumes, and reproduces
nothing. When speaking of capital, I do
not wish to be understood as referring to
money, for paper money is not capital; but
by capital, I mean the accumulated pro-
duct of man’s industry, available for his
support, or which will produce other com.
modities. *
Paper money is simply a medium of ex-
change for the transfer of commodities
from one person to another; and, when the
government calls for a loan, it does not
want money, but really wants commodities
to consume and to destroy.
“Nations,” says J. B. Say, “never bor-
row but with a view to consume.” He
also says, “War costs a nation more than
17
its actual expenses; it costs, besides, all that
would have been gained but for its occur-
rence.”
9. Had capital or commodities not been
loaned to government, they would have
been consumed reproductively, instead of
unproductively, and the wealth of the na-
, tion would have been thereby increased.
“All material products,” says Mill, “con-
sumed by any one while he produces moth-
ing, are so much subtracted, for the time,
from the material products which society
would otherwise have possessed.”
Labor and industry are therefore great
promoters of wealth and prosperity, and if
we wish to increase our wealth, or attain
real prosperity, we must not only have our
labor industriously and actively employed,
but it must be employed profitably, in pro-
ducing those material products which are
valuable to society.
In spite of all this, it may be said never-
18
theless, we are prosperous; for it is apparent
to every observer.
10. Now, having discovered some of the
elements of true prosperity, let us specify
Some of the characteristics of this apparent
or specious prosperity. In relation to it,
Dr. Wm. Elder says, “The knowledge Of
our immensely enhanced activity in all
branches of industry is brought home to
everybody in the Free States, by the almost
perfect distribution of its benefits.”
“It is estimated that the manufacturing
industry of the present year (1863), in the
loyal States, is nearly equal to that produced
in 1860, and when we consider the loss of
our Southern customers, who took six times
more of our products than all the world
besides, such results awaken wonder.” Other
significant signs of prosperity are said to be
the millions of property liberated from in-
cumbrances, the large increase in number
of depositors, and deposits in the Savings
19
Banks, the abundance of money,and property
on the rise. -
The above are some of the prominent
indications of this prevailing prosperity.
11. Now, considering the character of a
gigantic war, in its consumption of products,
its immense destruction of material, and its
consequent enormous expenditures, it can-
not be considered very surprising or won-
derful that the remaining labor should find
employment, and that nearly all branches
of business should experience “enhanced
activity.” Hence, before adopting the con-
clusion, that all this manufacturing industry,
and apparent wealth, is proof of our prosper-
ity, it would be well to examine into its
causes and results.
The great primary cause is the demand
of the government upon the farmer, the
woollen manufacturer, the ironmonger, the
papermaker, the tanner, and other artisans
and producers, too numerous to mention, for
20
the supply of a large army in the field, and
a large army of public officials out of it, which
inevitably furnishes a constant stimulant to
traffic, the effects of which are felt through-
out the whole fabric of Society.
It is thus that the loss of our Southern
customers, who were producers, is made up.
An army of government customers, who are
non-producers, have taken their places at the
marts of trade; and hence, instead of obtain-
ing products in exchange for our commodi-
ties, we are receiving debt, or mortgages upon
the property of the people, and this is called
prosperity.
That the expenditure of hundreds of mil-
lions of dollars per annum, with the with-
drawal of a large army of laborers from
productive employments should stimulate
industry and “enhance its activity” is not,
therefore, a matter of so much “wonder; ”
while the assertion that such a condition of
things is an evidence of prosperity must be
a great error of judgment.
21
For instance, suppose a nobleman, possess-
ing a large estate, occupied by one thousand
laborers, should authorize his son to withdraw
a considerable portion of them from their
productive employments to indulge in idle-
ness, while another portion were engaged in
the manufacture of materials, which those
indulging in idleness destroyed, we should
readily perceive that the remaining portion
would be actively and industriously employ-
ed in providing for themselves, and for the
large body of their fellow-laborers withdrawn
from productive employments. Then sup-
pose the son to be short of money, and, by
an agreement and with the indorsement of
his father, is allowed to issue promissory
notes and bonds to sustain his prodigality,
could that estate be termed prosperous?
Would it not be a specious or imaginary
prosperity because created and sustained by
debt 2 Is it not in some aspects a fair illus-
tration of our position ? Is not this gigantic.
8
22
war, and its consequent enormous expendi-
tures, by promises to pay, the mainspring
of our present national industry 2 And is
not this national industry created and sus-
tained by debt 7
12. That this war, and consequent war-
debt, is the mainspring of our present na-
tional industry, and the symbol of so-called
prosperity, I need only refer to the able
Report of the Bank Commissioners of Mas-
sachusetts for 1862, who, after a thorough
investigation, say, “It becomes necessary to
show the effect of the war on the business of
the Commonwealth’: —
“At the breaking out of the Rebellion, it
was feared that the business of the country
would be entirely prostrated, and the banks,
which make their gains out of the activity
of trade, expected to be the greatest sufferers.
Neither of these fears has been justified by
the event. Seldom, if ever, has the business
of Massachusetts been more active, or profit-
23
able than during the past year. The war
has brought into activity many mechanical
employments for which there is little occa-
sion in time of peace ; such, for example, as
the manufacture of arms and ordnance, camp
and garrison equipage, saddlery and artillery
harness, and military clothing and accoutre-
ments. It has also greatly stimulated the
manufacture of boots and shoes, and of wool-
len goods; while the subsistence of the army
has furnished a constant and remunerative
market for breadstuffs and provisions. There
is hardly a branch of domestic industry which
has not been actively employed. * * *
Nor has the condition of the operatives
deprived of their usual employment been
materially impaired. So great has been the
draft upon the male population to fill the
army, that there has been an unusual demand
for men's labor in other directions, while
female operatives have found occupation in
the manufactories of clothing, &c.
24
“The railroads of the Commonwealth were
never more profitably employed, and they
have made larger dividends, and their stocks
have borne a higher price, than at any
former period. The vast grain crops of the
West have sought a market on the seaboard
or in foreign countries, and having been
deprived of their usual water-carriage by
the closing of the Mississippi, have poured
through the canals, and over railroads lead-
ing to New York and Boston. The carriage
of troops and army supplies has, also, fur-
nished a considerable business, even to the
New England roads, while those of the Mid-
dle and Border States, leading toward the
seat of war, have been completely occupied
with the new traffic.
“The loss of the cotton crop, and the
closing of the seaports and great rivers of
the South seemed likely to destroy the oc-
cupation of our mercantile marine; but
here, again, new channels of business have
25
arisen, and anxieties have been dispelled.
The necessity of transporting great bodies
of troops from point to point along the sea-
board, and of furnishing them subsistence,
has called into the service of the government
a vast fleet of transports, for the hire of which
the owners have received rates of compen-
sation greatly exceeding the ordinary profits
of commerce.
“Every steam-vessel, capable of navigating
either the ocean, or harbors and rivers, has
been thus employed; and many more, previ-
ously regarded as worn-out, and no longer
seaworthy, having been flimsily repaired,
and made to pass through a hasty and cor-
rupt inspection, have gone out laden with
valuable property, or invaluable lives, to be
wrecked or rescued, as the chances of weath-
er or as skilful seamanship might determine.
The shipyards, both public and private, have
been worked to their utmost capacity, in
the construction of iron-clad gunboats and
3* *
26
other vessels of war; while machine-shops,
rolling-mills, and foundries, have been equal-
ly busy in building their engines, rolling
their armor-plates, and casting their guns.
Nor has foreign commerce greatly declined,
the grain-trade and the import of munitions
and arms having come in to supplement the
loss occasioned by the detention of cotton.
* * * * IN EVERY DEPARTMENT OF LABOR
THE GOVERNMENT HAS BEEN DIRECTLY OR INDI-
RECTLY THE CHIEF EMPLOYER AND PAYMASTER.”
Such is the decision of our Massachu-
setts Bank Commissioners, that it is debt,
national debt, the consumption and destruc-
tion of so much of the capital of the nation,
which amount — an incumbrance upon the
property of the people — has produced this
industrial activity. .
13. Whereas, in former times, every ad-
dition to the stock of one man's produce
created a demand for another man's produce,
and that was the constant stimulant of na-
27
tional industry and wealth, now a new
element in political economy has been dis-
covered, in which nearly every addition to
the stock of one man's produce creates a
demand for government debt.
Industrial activity, created by running
into debt, is thereby termed a prosperous
condition. To me however it seems far other-
wise; as it partakes of a somewhat similar
character to that of the father, whose son, a
spendthrift, squanders his father's fortune,
burdens his estate with debt, thereby anni-
hilating so much of his father's capital, to
the loss of its productive employment.
14. Debt is not and cannot be a healthy
stimulant to prosperity, unless the amount
of that debt has been spent in production,
And if our national industry is the offspring,
to any considerable extent, of the war which
has created our great national debt, as all
thoughtful minds must admit, such a condi-
tion of things cannot, with any semblance of
truth, be termed prosperous.
28
If the rapid increase of debt—which is to
a great extent the destruction of capital, and
a mortgage upon the property of the citizens
of the United States, for the payment of
which their estates stand pledged —is the
normal condition of prosperity, then indeed
are we prosperous.
But, if prosperity consists in the produc-
tive employment of labor, the payment of
debts, and the economical employment and
accumulation of capital, then it cannot be
said that we are prosperous.
15. It is therefore necessary that as a
people, we should remember, that no real
prosperity can exist, and that the impover-
ishment of the masses of our people must
ensue, unless this war is brought to a speedy
and successful termination. Says Ricardo,
“It is by the profuse expenditure of gov-
ernment, and of individuals, and by loans,
that a country is impoverished.” -*
16. The prevailing blindness to our real
29
condition is not, however, the result of the
industrial demands of war alone, but it has
been greatly promoted and fostered by the
issues of a paper currency, and a bonded
debt by the government. And this brings
me to the consideration of our NATIONAL
DEBT AND CURRENCY.
T EI E
NATIONAL DEBT AND CURRENCY.
17. Our National Debt is an almost com-
plete annihilation of capital; nearly its
whole amount having been withdrawn from
productive employment — it stands to-day
a mortgage upon the property of the peo-
ple, the interest upon which must be met
by taxes paid by the people.
That we have abundant ability to sustain
the burden of a large national debt, I have
not the slightest doubt. That a debt, of
reasonable proportions, distributed among
the people, would have the tendency to
unite us more compactly and steadfastly as
an undivided nation, I believe susceptible
of proof. And that Mr. Chase, the Hon.
Secretary of the Treasury, has played his
31
part with admirable shrewdness, tact, and
skill, I fully believe.
Nevertheless, I am of the opinion that
debt created by war, and consequent de-
struction of capital, cannot result in the
material wealth and prosperity of the na-
tion, whatever specious appearances it may
possess. If, however, the hundreds of
millions of capital destroyed, and debt creat-
ed had been spent in improving rivers and
harbors, the construction of railroads, the
widening of canals, the advancement of
learning, and the encouragement of science,
all of which would have been a productive
expenditure of capital, then indeed should
we have been enabled to rejoice in our pros-
perity as a people, and in the brilliant posi-
tion we should have attained among the na-
tions of the earth.
It is often said, England is prosperous; she
sustains a large debt and so can we. This
is all very true; but we know not to what
32
higher degree of prosperity she might have
attained, had she not been burdened with
debt; for with all her prosperity, the mass-
es of her people are impoverished.
“The poor of Great Britain,” says Joseph
Kay — than whom no one is more competent
to express an intelligent opinion —“ are
more depressed, more pauperized, more nu-
merous in comparison to the other classes,
more irreligious, and very much worse edu-
cated than the poor of any other European
nation, solely excepting Russia, Turkey,
South Italy, Portugal and Spain.”
... We do not, therefore, want to imitate Eng-
land, - far from it, there the rich grow
richer, and the poor poorer, — but we desire
to raise the masses of liberty-loving Ameri-
cans to a higher level, and to a more pros-
perous condition, rather than oppress them
with a burden of government taxation,
which, in all nations, inevitably falls directly
and indirectly upon the poor and producing
classes.
33
18. Our national debt, although for a
noble purpose, has been contracted through
the deceptive character of a paper curren-
Cy, without the reception of an adequate
value. The increased prices of commodi-
ties produced by paper issues have very
much enlarged it. The nation has been, in
fact, an immense borrower of a depreciated
currency, which it agrees to refund in spe-
cie. In other words, we are borrowing com-
modities at high paper values, which are fifty
per cent, premium over their specie value,
and agree to pay for them in specie. Our
debt is therefore undergoing a rapid increase,
because we thereby agree to pay $150 in
gold for every $100 we receive. º
19. The doctrine of the celebrated John
Law was, that money was the cause, and
not the effect, of wealth; and he favored
large issues of paper money, as the high
road to wealth. He tried the experiment,
and met with complete disaster.
4
34
In our day, there are thousands who be-
lieve and advocate the same doctrine.
There is a general impression that the
more paper money issued, the better; and
the idea is commonly entertained that the
more of it we have, the more wealth we
possess. In some quarters it is asserted that
there is now an actual necessity for an ad-
ditional issue of legal tender currency. Thus,
the public mind appears confused by the de-
ceptive character of our paper currency.
20. The issue of legal tender currency
was, on the 30th of September, $420,503,107
— and the national debt inclusive, $1,222,-
113,559.80 — which debt must be very con-
siderably increased by outstanding claims
against the government.
21. Our paper currency consists of two
kinds, one of which rests upon confidence,
and the other upon authority. If we would
preserve its value at par with coin, the
quantity issued must conform to the amount
35
required by the country to circulate its prop-
erty and products at average specie values;
otherwise, it will be depreciated, or appre-
ciated, as it is increased or decreased above
or below its just proportion.
22. Money is properly a medium of ex-
change for the transfer of property between
man and man ; it represents and measures
value, and facilitates the exchange of pro-
ducts, and is endowed with legal power to
represent actual value. Every nation re-
quires a certain amount of money sufficient
to make its exchanges, transfers of property,
and circulation of commodities, and it is
graduated or distributed among them in ac-
cordance with the general law of supply
and demand regulating all values.
“Gold and silver,” says Ricardo, “having
been chosen for the general medium of cir-
culation, they are, by the competition of
commerce, distributed in such proportions
amongst the different countries of the world
36
as to accommodate themselves to the natu-
ral traffic which would take place if no such
metals existed, and the trade between coun-
tries were purely a trade of barter.” There
is them, we may say, a general level of val-
ues, which are moved by the metallic circu-
lating medium of the world. And when
any one nation, by any method, increases
its circulating medium, the values relative-
ly remain the same, but the prices become
enhanced, and those prices, in specie-paying
countries check exports, while they increase
imports, and turn the balance of trade
against the country, until by the exporta-
tion of specie, and consequent reduction of
the currency, the circulating medium is re-
stored to the general equilibrium.
23. In countries where the currency is
exclusively paper, the effect is somewhat
different ; in those countries, the values re-
main the same, and prices become greatly
enhanced, but they do not have the same
37
effect upon imports and exports, because as
prices advance, the currency is inversely
depreciated. If therefore, the currency
depreciates as rapidly as prices advance, as
manifested in the premium on gold, then,
although at higher prices, the values of gold
and commodities are preserved at their just
equilibrium, and scarcely any effect is pro-
duced upon either exports or imports.
24. Almost universally amongst the civil-
ized nations of the earth, gold and silver
have been selected as the standard meas-
ures of value for carrying on their relations,
because, of all commodities they are the
least fluctuating in value. Gold has a rec-
ognized and stable value throughout the
world, which value is determined, as a gen-
eral rule, by the cost of production; and the
direct tendency of this metallic commodity
and currency, is to distribute itself where it
is most wanted ; thus preserving the gener-
al level of value between the whole ocean
4*
38
of currency and other values. In order,
therefore, to ascertain the condition of our
currency, or the currency of any people on
the face of the earth, it must be tried by
that standard. Bank-notes, paper-credits,
and government-currency are not commodi-
ties, and have no intrinsic value, and their
marketable value must therefore be tried
by the generally recognized standard of
value.
25. To prevent depreciation, paper mon-
ey must be so regulated as to keep it in the
same condition, in regard to amount and
value, in which the medium of exchange
would exist, were the circulation purely
metallic. -
When specie payments were suspended
by the Bank of England in 1797, the value
of paper currency was maintained for sev-
eral years, because the issues of paper were
regulated with reference to the indication
of exchanges or the price of gold.
39
26. If there was perfect security for the
issue of paper money in only such, quanti-
ties as would preserve its value relatively
to the mass of currency and values through-
out the world, it would never suffer depre-
ciation, and would be of great advantage to
the public. But no such security can be
given; the production of it is too easy and
simple a process, and the temptation, when
in want of money, too strong to restrain the
issue. Hence the instability and unsatis-
factory character of Paper Currency.
27. The large issues of paper money by
our government have enhanced prices, but
have not produced any augmentation of
value; yet, because of the general rise in
prices, a popular impression prevails of a
large increase in wealth. The prevailing
opinion seems to be that a general rise in
prices is indicative of increasing wealth,
whereas, nothing is more absurd. Price does
not create value. Neither can legislative
40
enactment. “Value,” says Mill, “is a rela-
tive term. The value of a thing means the
quantity of other things which can be ob-
tained in exchange for it.” “By the price
of a thing we understand its value in mon-
ey; by the value or exchange value of a
thing its general power which its possession
gives in the purchase of other commodi-
ties.” “There may be a general rise in
prices, but there cannot be a general rise in
values.”
If there is a general rise in the money
prices of all things, it cannot make the
slightest difference as to the wealth of the
community, because their exchangeable
value, or relation to one another, must re-
main precisely the same, although it may
take more money to effect transfers. The
great principle to be constantly borne in
mind is, that the value of capital is the essen-
tial thing, and constitutes the wealth of so-
ciety. If half our currency was swept
41
away, the nation would not be any the
poorer. With our present large issues of
paper currency, values circulate at high
prices, but, as a general thing, one product
will not exchange for more of another than
it would on the old specie basis, which proves
that real value remains the same, while the
variation in prices is caused by an alteration
or depreciation in the value of money.
But, why call it a depreciation in the value
of paper money, I may be asked.
28. Because, paper money will not pur-
chase as much of the commodities of life as
the same amount of our former currency
would do, which, after making all reasona-
ble allowances for other operative causes,
proves that money has lost its purchasing
power, and become depreciated. If we
take the two articles of consumption, sugar
and coffee, we find, after deducting the ad-
ditional duty, that the advance in price has
been considerably over fifty per cent. It
42
consequently takes $150 in paper currency
to pay for the same amount of those pro-
ducts procured by our old currency, or the
currency of the world, for $100, while the
value of sugar and coffee holds its same
relative proportion to each article. With
two pounds of sugar one could procure one
pound of coffee, under our old specie cur-
rency, as they now can under our paper cur-
rency. Our currency, therefore, has been
unduly increased and depreciated, while
values have not been in the slightest degree
affected. The paper price and imaginary
value of one hundred barrels of flour is
nine hundred dollars, but with specie at fifty
per cent, premium its exchangeable value
is only six hundred dollars; therefore, one
hundred barrels of flour will pay for only
six hundred dollars worth of foreign produce
which we consume, and for which our flour
is exchanged. Hence, its real value consists
in its exchangeable value of six hundred
43
dollars, and not in its paper, fictitious, or
imaginary value.
29. There are only two ways by which
a currency can be depreciated. If metallic,
by a debased or degraded coin, or a redun-
dancy of gold; if paper, by loss of confi-
dence, or over-issue. Gold, being a com-
modity, has its value based, as a general
rule, like all other values, upon the cost of
production, and when redundant in one
country, its price, being fixed, remains unal-
tered, while the prices of all other values
have advanced ; therefore gold, being the
most valuable at its price, is taken in prefer-
ence to other values which bear a high price,
for exportation. Paper, however, when is-
sued in excess, having no intrinsic value,
does not rise relatively with other articles,
and, though the price remains unaltered, is
not wanted for export.
30. Hence, the excess of paper money in
the United States never goes out of it; but
44
is kept in constant circulation ; it cannot be
returned to the issuer for redemption, but
must be pressed upon the market, and passed
from hand to hand: and, as it is not desira-
ble for its own sake, but only for what it
will accomplish, every holder is desirous of
employing it in the purchase of something
of value. It acts, therefore, as an originat-
ing cause of speculations, and the activity
of circulation engendered has the direct
tendency to enhance prices and foster ex-
travagance. t
Says Tooke, “Additional currency, in
whatever way it comes into circulation,
must eventually raise the price of com-
modities and labor.”
31. A certain amount of circulating me-
dium is demanded, and no more ; when that
amount is exceeded, its value is diminished,
because it requires more of it to make ex-
changes, and is not therefore worth as much
as before. Money controls or commands
45
capital, and the more or less capital a certain
amount of money will control, demonstrates
its value. If the amount of money is so
profuse, by the introduction of a paper cur-
rency, that it takes fifty per cent. more to
buy with paper what one could buy with gold,
the currency of the world, it seems to me
the depreciation of the currency must be
manifest. As an illustration of deprecia-
tion, simple and to the point, let us take the
case of any man who laid by one hundred
dollars of our old currency; could he not
to-day, with that, buy one hundred and fifty
dollars' worth of any commodities as valued
by our present currency? Will any one say,
then, that one hundred dollars of our present
currency is worth as much in real value as one
hundred dollars of our old currency? No.
Has it not then, depreciated 2 Money hav-
ing a legal and nominal price, which is inva-
riable, any depreciation in its value must
show itself in the enhanced prices of com-
5
46
modities. In California, however, where
gold is current at par, the depreciation is
seen in the price of legal tender.
“No government,” says Say, “has the
power of increasing the total value of mon-
ey otherwise than nominally. The increased
quantity of the whole reduces the value of
every part.” Says P. Webster, in relation
to vain endeavors to increase the value of
money by paper issues, “I have known
people who had not milk enough to water
it, but the nutritious particles of milk were
not increased thereby. I have known chil-
dren to change their pistareens to coppers
to gain a greater heap of money; in these
cases the substance was wanting ; the Show
though increased was delusive.”
“Any further increase,” says Mill, “of
paper beyond the amount substituted for
a metallic currency is but a form of rob-
bery.”
“A circulation can never be so abundant
47
as to overflow,” says Ricardo; “for by di-
minishing its value, in the same proportion,
you will increase its quantity, and by in-
creasing its value, diminish its quantity.”
32. While Secretary Chase, as I have
just noticed in his report to Congress, en-
tertains somewhat similar views, relative to
depreciation caused by increase of the cir-
culating medium, expressed in these words:
“Such addition tends inevitably to deprecia-
tion, and depreciation, if addition be contin-
ued, will find its only practical limit in the
utter worthlessness of the augmented mass,”
yet, he seems to question the representation
that any “large measure” of the increase
of prices is attributable to the existing'
amount of circulation.
With all his attempted explanations, how-
ever, he is very cautious in his statements
as to what proportion of the present en-
hanced prices is properly chargeable to our
depreciated currency, and goes on to say,
48
that “much the greater part of the rise
of prices, not accounted for by other causes,
as well as much the greater part of the
difference between notes and gold, is attrib-
utable to the large amount of bank-notes
yet in circulation.” And then, after giving
the following excellent advice, viz.: “all
proper measures should be adopted to hasten
the return to the normal condition of prices
and business”— he urges the further estab-
lishment of national banks.
33. It seems to me our Hon. Secretary
is in this matter very inconsistent. For,
in the first place, he says addition to the
currency tends to its utter worthlessness.
2d. That bank circulation is the cause of
the greater part of the depreciation between
notes and gold. Then, after giving whole-
Some advice about returning to the normal
condition of prices and business, he turns
about and urges the further issue of bank
circulation by the establishment of national
49
banks. He is really an advocate, therefore,
by other instrumentalities, of the same results
which he deplores. Suppose, for instance,
our State banks were converted into national
banks, would their circulation be thereby
decreased ? Not at all; their bills, instead
of being furnished by themselves, would be
provided by the government, and their cir-
culation would be increased rather than
decreased, because their bills would have an
additional currency, being current for all
government dues excepting duties on im-
ports, and for all government debts except
interest on bonded debt; and, with the cur-
rency of their bills increased, their circulation
could not fail to be augmented. But, not
only does the Hon. Secretary wish State
banks to adopt the new system, but he
desires to establish other banks throughout
the country, the effect of which would be to
increase bank circulation and foster specula-
5%
50
tion, bringing about the very disastrous
results which he deplores.
34. Our present bank circulation, how-
ever, is not, in my opinion, the cause of the
difference between notes and gold. That
assumption is entirely unsupported by any
good or sufficient reason. Mr. Chase says,
with great truth and accuracy of statement,
“that the currency cannot be materially aug-
mented without evil consequences of the
worst character.” In order, therefore, to
ascertain from what quarter evil conse-
quences have proceeded, we must ascertain
from what source the increase of our curren-
cy has been derived. According to our
returns nearest Jan. 1, 1861, the bank circu-
lation of the loyal States was $140,000,000,
and nearest Jan. 1, 1863, $168,400,000, an
increase of only about $30,000,000, which
amount is at the present time decreased, and
does not equal the amount of government
legal tender notes, now withheld by the
51
banks, as a basis for their own circula-
tion.
35. Within the same time, the govern-
ment has enlarged the volume of currency
by adding over $400,000,000, which shows
conclusively that the “material augmenta-
tion of the currency,” productive of these
“evil consequences,” has been derived from
the government.
36. But, because of the “evil conse-
Quences” arising from a depreciated curren-
cy the Hon. Secretary seeks to throw upon
the State banks the odium thereof, and says:
“Were these bank-notes withdrawn from use,
it is believed that much of the now very
considerable difference between coin and
United States notes would disappear.” That
is true, very true; but would not the same
principle apply with equal force to the con-
traction in the issue of legal tender, to the
same amount” Certainly. Of this there
can be no question. The reduction of the
52
currency to the amount of $200,000,000,
whether by the withdrawal of bank notes or
legal tender, must increase the value of the
remaining currency, and cause “much of the
difference between coin and notes to disap-
pear.” Its natural effect would be to cause
a decline in the prices of all values, including
gold, because gold is a value; and the reason
for the decline would be, because the amount
of moneybeing $200,000,000—smaller than
before, with the same values to circulate,
those values must, in the very nature of
things, be reduced in prices in order to be
circulated by the remaining money; and
this decline in prices would demonstrate the
increased value of money, because a certain
amount of money would command more of
commodities or values than before.
This vital principle, namely, that by dimin-
ishing the quantity of currency we increase
its value, and by increasing the quantity we
decrease its value, appears, to be acknowl-
53
edged and approved by Secretary Chase.
Still, notwithstanding his assent to its posi-
tive truth, he persists in advocating the
establishment of national bank circulation,
thereby increasing the quantity of currency
and decreasing its value, which, according to
his own reasoning and belief, must be pro-
ductive of evil consequences.
37. It is apparent that consistency, as
well as the public welfare, requires the Sup-
pression of all bank circulation, both State
and national. For, as Mr. Chase says, “it
is believed, were State bank circulation with-
drawn, much of the difference between notes
and coin would disappear.” Now the same
principle applies with equal force to national
bank as to State bank circulation; conse-
quently, if the suppression of State bank
circulation would be productive of such
happy effects, then certainly the public wel-
fare demands the suppression of all other
bank circulation, and the immediate discon-
54
tinuance of all projects calculated to create
it. One class of circulation should not be
suppressed for the creation of another, as no
advantage would be gained, and all good
effects would be neutralized ; but both
classes should be suppressed, and our banks,
both State and national, become simply
banks of deposit, and allowed to circulate
nothing but the legal tender currency of the
country.
38. If we ever return to the “normal
condition of prices and business,” it must be
through the reduction of the circulating
medium, brought into just relations to the
circulating value of the metallic currency of
the world. This reduction can be accom-
plished by two methods. One, the with-
drawal or suppression of a portion of it; the
other, the introduction of it into the South-
ern States, where it is now shut out. The
entrance of a portion of it there, to circulate
their values, would evidently reduce the
*
55
amount circulating in the loyal States, and
the same effect would be produced on prices
in both cases. Hence, if we are successful
in suppressing the Rebellion, and open the
country to the circulation of our currency
in the transfer of values, then the currency
existing here, in the loyal States, will be
reduced by precisely the amount required
to circulate values in the Southern States,
and prices of gold and other values will
decline, in consequence of the reduction of
the currency, compared with values circu-
lated, until those prices are brought to their
proper level, as measured by the reduced
volume of paper currency. But those prices
will not be brought to their “normal condi-
tion” unless the whole volume of currency
shall stand reduced to its just proportions
relative to all values, or, to the same amount
as it would be, were the currency of the
country gold and silver. And unless it be
so reduced by one of these two methods, its
56
value must continue to be depreciated be-
low that of our neighbors, or what is the
same thing, redundant compared with the
currency of other countries; which depreci-
ation is measured to a great extent by the
price of gold.
39. Speculations and loss of confidence
in our finances do of course produce their
effect upon the price of gold, causing more
or less variation, sending it sometimes higher,
then by reaction lower, than its relative
paper value to all other commodities; but
as a general rule it marks by its average
price the depreciation of paper. If paper
is not depreciated to the amount of the av-
erage premium on gold, why should gold
move out of the country, at So high a price?
In the present currency our products bear
an inflated paper or fictitious value; and
fter the premium on gold is subtracted,
they are of no more real or intrinsic worth
than gold. Consequently, legal tender is
57
depreciated to that extent. If our products
were much cheaper than gold, after deduct-
ing the premium on gold from their cur-
rency prices, it is evident the exportation
of gold would cease.
40. That the prevailing high prices of all
commodities is wholly attributable to depre-
ciation, no one pretends to assert. For, the
comparative state of demand and supply is
known to be one of the prominent opera-
tive causes in prices. This is seen es-
pecially in the two leading articles of cot-
ton and wool. The short supply of cotton
has greatly enhanced its price, and the
great demand for wool, in consequence of a
short supply of cotton and other causes, has
greatly increased the price of wool. Never-
theless it is apparent that these articles,
whatever may be their prices, are just so
much higher in legal tender notes, as those
notes are lower than our old specie cur-
rency.
58
41. Supply and demand have their ef.
fects on prices the world over, and if we are
engaged in a war, and are large consumers
of certain articles, those articles in foreign
countries, unless their importation or ex-
portation is restricted, feel the effect of it,
and are affected in price, there as here, from
the same causes; but, over and above that
cause and every other operating upon prices
universally, there is one cause which creates
a large difference in the prices of the same
values, between those in our own and for-
eign countries. For instance, two hundred
pounds of cotton are worth in Boston one
hundred and fifty dollars. In Liverpool, the
same value, two hundred pounds of cotton,
are worth one hundred dollars. Now, the
same causes with one solitary exception,
which have operated to carry cotton up in
Boston to one hundred and fifty dollars,
have carried it up in Liverpool to one hun-
dred dollars, and that, the circulation in
59
Boston of a large issue of legal tender
notes; hence, we may say with confidence
that the difference in price of fifty per cent,
must be caused by a depreciation of our
currency.
And that depreciation manifests itself
throughout the whole range of money
prices, at about the same ratio, whether
high or low. According to the Merchant's
Magazine for November, there are fifty-five .
articles upon the Prices Current, which show
a rise since 1861 of eighty-one per cent. ;
in the same time, the rise of the principal
railroad stocks has been one hundred and
thirty-nine per cent. These enhanced pri-
ces are partially owing to increased values,
common throughout the commercial world,
while the remainder is owing to the exist-
ence of a depreciated currency.
42. Some of the effects of enhanced
prices are seen in the record of the Clear-
ing Houses in New York and Boston. The
60
Clearing House, it is understood, is where
the total amount of payment to be made
by each bank is set off against the total
amount to be received by each from other
banks, every day, and the balance only paid
in money. These clearings, therefore, indi-
cate the amount of money transfers of
property made by bank deposits, from day
to day, although they do not cover those
made from account to account in the books
of each bank. *
In New York City, the clearings per day
were, in 1857, $26,968,371; in 1858, $15,-
393,735; in 1859, $20,867,333; in 1860,
$23,477,737; in November, 1861, $19,590,-
177; in November, 1863, $76,573,118. In
Boston, November, 1861, $3,715,969; in
November, 1863, $8,545,813.
Here, it appears, taking the highest aver-
age in the year 1857, when speculation was
rampant, and the expansion of the curren-
cy had inflated prices, and brought upon the
61
country a monetary crisis, that the circula-
tion of values, or the transfer of property,
now takes three times the amount in our
inconvertible paper currency which it then
took in a convertible currency.
To move commodities or values trans-
ferred by high paper prices, bank deposits
also are largely increased, as will be seen
below.
The deposits in New York City banks, in
1859, were $76,665,092; in 1860, $79,716,-
004; in 1861, $83,252,466; in 1862, $112,-
195,094; in 1863, $138,195,914. Deposits
in Boston banks, in 1861, $24,760,563; in
1863, $32,371,254.
It will be observed that the amount of .
clearings before the issue of legal tender
notes was not so great in proportion to the
amount of deposits as it now is, by one
hundred per cent. ; which indicates that a
lack of confidence in the circulating medium
as a value, or a more than ordinary desire
6*
62
to turn whatever money is possessed into
productive employment has greatly in-
creased the circulation of deposits.
43. Paper money freely issued has large-
ly augmented the volume of circulating
medium, and raised its level, here, there,
and everywhere it circulates. The quantity
having been increased, all commodities or
values circulated by it bear their proportion
as to price, by partaking of the “augment-
ed mass; ” then prices being enhanced, de-
posits and clearings must be increased, and
the whole superstructure of trade, business,
and values adjusted to the new level of cur-
rency.
44. The over-issue of paper money by
the government has been a most expensive
undertaking. Not that it costs anything in
itself, for it is an easy and fascinating pro-
cess, to pay debt, by creating debt. So easy,
that it is said, a member of the Continental
Congress once exclaimed in debate, “Do
63
you think, gentlemen, that I will consent to
load my constituents with taxes, when we
can send to our printer and get a wagon-
load of money.” It is also reported of a
patriotic old lady, that she considered it a
shame “that Congress should let the soldiers
suffer, when it has power to make just as
much money as it chooses.”
Yet, although so easy, it is a most expen-
sive process; it costs the government vastly
more than they save in interest; because,
by being obliged to pay increased prices for
all it consumes, its debt is increased with
much greater rapidity than it otherwise
would be. It virtually receives but seventy
dollars in value for every one hundred dol-
lars it agrees to pay. In other words, it
agrees to pay in the currency of the world
one hundred dollars for every seventy dol-
lars it borrows; because in that currency it
could buy, for less than seventy dollars, the
very same value for which it pays one hun-
dred dollars in paper, or legal tender.
64
Thus the national debt is largely in-
creased without any additional value being
obtained, which increases the taxes and
throws the burden upon the people.
The effect of the issue of paper money
has been likened to insensible perspiration,
which weakens the body, and wastes the
constitution before the patient knows he is
sick; and it is said, a man possessing a great
bundle of it is apt to be cheated, in spite
of his convictions, into an opinion that he
is richer than he is, and led into extrava-
gant expenditures by the delusion. There
is a great deal of truth in those statements;
and although our government may not feel
its weakness, nor the people their burden,
owing to its strong constitution, and the il-
lusion of a paper currency, yet, unless
there is a contraction, rather than an expan-
sion of our currency, those results are in-
evitable. -
The depreciated currency has not only
65
increased the government debt and taxes
upon the people, but it has been severely
felt by the prudent, industrious, and eco-
nomical portion of our people, especially by
annuitants, and salaried men; and their in-
come in consequence of it, has been virtual-
ly reduced one-third. While the better
class of citizens have suffered, by the de-
preciated currency, all money debtors have
been enabled to pay their creditors in a
sum of money really less than the fair
claims. There are thousands of our citizens,
however, who are really sufferers by the de-
preciated currency, who are entirely igno-
rant of it; they look over their stock of
goods, or other property, and cast up the
amount, as estimated in paper prices, with
evident satisfaction ; and, in consideration
of large profits, spend their earnings and
live extravagantly; but, when that day
comes, as come it must, and these enhanced
paper prices vanish, as the bubble breaks,
66
then they will have a glimpse of their real
condition, and will conclude that all is
not prosperous that appears prosperous.
45. It is often asserted that no more pa-
per has been issued than the wants of com-
merce require, that it is all employed and
there are calls for more. We have no doubt
that at the present high prices of all values,
the currency is all wanted; but it is also
certain that if more were issued, more would
be required, as prices would advance pro-
portionally. “The wants of customers,” says
Lord Overstone, “never check issues; they
are absolutely illimitable in the nature of
things; money is wanted by everybody to
any amount.”
It is impossible to satisfy the craving for
money, so long as there is in it the slightest
power to purchase values. When the Con-
tinental Congress “poured out their currency
like water,” says Mr. Felt, “they perceived
with anguish that its nominal abundance
diminished its real value, and left the vacuum
67
of want unsupplied, whose sound continual-
ly came to their ears, like a warning curfew,
and whose cry increasingly was, Give, give.”
No, the desire for more money is no proof
of the necessity for it, for that desire would
continue, until it took $1000 “to pay for a
breakfast; ” and would increase as the value
of money decreased.
46. Any increase of the now greatly
expanded volume of currency, whether by
the issue of legal tender or by an addi-
tional bank circulation, will only intensify
the cry, which we now hear ascending from
all quarters, – from mechanics, soldiers,
clerks, and artisans, for a further increase of
wages and salaries, the tendency of which
will be, in the words of Secretary Chase,
“an extravagant increase of disbursements
and an aggravation of the evil.”
47. Instead of increase, the welfare and
best interests of government and people
demand a decrease. A contraction of the
currency would result in Saving the people
68
from the burden of a large increase of debt
and taxes, and reduce it to the “normal
condition of prices and business.”
Mr. Chase suggests it in one sentence,
but, alas, in the next, proposes again to
augment it by the establishment of a na-
tional bank currency.
48. To accomplish so desirable an object,
bank circulation, both State and National,
should be suppressed, and a reduction of
the issue of legal tender ensue, until the
currency is brought to its normal condition,
or at par with the precious metals. The
currency of the country, so long as this war
is in progress, should be confined exclu-
sively to legal tender notes ; as the govern-
ment is entitled and should possess whatever
benefits may be derived from the supply of
a circulating medium, but the volume of
that currency should certainly be reduced
to its proper level, which is at par with
gold.
49. What the country is really suffer-
69
ing for, is a currency which possesses a
fixedness of value; to attain that, it is es-
sential that there should be a fixed, positive,
and permanent amount of currency, — an
amount which cannot be increased or tam-
pered with by further issues of tender,
interest-bearing notes, or national bank cir-
culation,- an amount, whatever may be the
sum total, which shall represent in itself a
certain percentage of real value, thereby
furnishing stability to prices. Then values,
having assumed their relative proportions
to the circulating medium, would no longer
be affected by it, but would circulate at
steady though high prices, or only as they
were moved by causes operating univer-
sally.
50. Our government has assumed a
fearful responsibility, in the increase of the
circulating medium by the over-issue of
paper; it is a power that has always been
abused, whenever and wherever exercised.
7
70
generally resulting in disaster. When once
the power is assumed, it being so easy to
print paper, and impossible to create value
by enactment, over-issue is inevitable ;
money becomes depreciated, and values un-
settled throughout the nation.
51. To-day our Honorable Secretary of
the Treasury, Mr. Chase, holds, to a great
extent, this power of issue — which he has
received from the government—in his own
hands. He has within his grasp the scale
of value, the graduation of which he can
vary at pleasure. It is a vast, responsible,
and momentous power, of too great propor-
tions, and weighty with too many precious
interests, to be intrusted to the guardian-
ship of any fallible man. Such is his power,
that, by the retention and issue of currency,
he can carry monetary prices up or down
at will. He can impoverish or enrich, cre-
late or destroy, at pleasure.
It is fortunate for the country, however,
71
that our present Secretary is a man of so
much sagacity and possesses such a high
and honorable character. For it is by his
prudence, foresight, and good judgment that
we have been preserved from plunging still
deeper into egregious folly.
Whatever may be Mr. Chase's virtues, it
is nevertheless one of the great evils of an
inconvertible paper currency that it places
in the hands of any one man such tremen-
dous power; for we know not who may suc-
ceed him.
52. We are now apparently prosperous;
our financial machinery is running smoothly;
the paper mills are at work and are making
certificates of debt, which the people take .
for their products; our currency is one of
debt, and that we are passing from hand to
hand for values at high debt prices; we
are, in fact, submerged in debt; it is over,
around, and about us, the debt of towns,
cities, counties, and of the nation, but as
it presses like the atmosphere with such
72
equality upon our system we feel not its
pressure.
53. Persons under water, having tons of
it over their heads, feel not its weight; and
it is only when they come out, and attempt
to raise a portion of it, that they become
aware of its ponderous character.
Thus it will be with our people when
they attempt to extricate themselves from
their present position; they will then begin
to realize for the first time their burdened
condition.
We are apparently prosperous, but when
we return to specie payments, these imagin-
ary paper values which everywhere prevail
will be destroyed, and the people will dis-
cover that they were not really prosperous,
but were much poorer than they had anti-
cipated ; and they will then be convinced
that wealth consists in the abundance of
commodities money will procure, rather
than in the amount of money that com-
modities will command.
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