^ o H\ y § 71 • Q> 
 
 3 &tA/ j- 
 
 • 4 
 • •• 
 
 SPECIE PAYM.EN.TS; 
 
 Friend Jonathan: I perceive, from the newspapers of the 
 day, that your people are calling, some for specie payment, some 
 for increase of currency, and others again for financial changes, 
 vaguely conceived and still more vaguely defined. 
 
 This being the case, friend Jonathan, it may not be amiss for 
 us to consider the different propositions of these your clamorous 
 people, as well as the reasons of their clamor. 
 
 You will observe, friend Jonathan, that those demanding a re- 
 turn to specie valuations are generally the Eastern portion of your 
 people, who are, and always have been, the creditor class ; while 
 the demand for more currency comes, very generally, indeed, 
 from the whole balance of your nation. The great Northwest, 
 including the entire South — which, you know, has yet to recover 
 its lost ground in the way of financial prosperity — are to-day well 
 nigh drained of currency. The vast increase, both in population 
 and improvements, of the great West has been, and continues to 
 be, so rapid, that had it started even with the East in the distri- 
 bution of currency, it would not now have anything like a suf- 
 ficiency to represent its increased business capacity. 
 
 Therefore, friend Jonathan, relief of some kind is looked for by 
 your people, and think you not it should be granted them ? If 
 so, in what shape shall it come ? By a response to the cry of the 
 East and older portion — the mere corner of your country ? To 
 where business pays 5 to 7 per cent, interest for money, as in the 
 East, or where it pays 10 to 20 per cent, as, at the present time, 
 in the West and South? Which shall ic be? Which requires it 
 most, think you? Why is it that business in one section pays 
 less than in the other? Is it not evident that where money is 
 the highest, it is the scarcest, and the demand for it the greatest ? 
 Surely, then, the section where scarcity prevails is the one re- 
 
 
2 
 
 Specie Payments. 
 
 quiring relief, and, you jjerceive, it must alone be obtained by 
 increasing the commodity you wish to cheapen. A response to 
 the cry of the East, to-wit, specie payment, will only increase 
 the bnrfbet Af Wesjt : causing their business to pay even 
 higher tatfeS «*tft (?*«»©• of money ; chilling and checking their 
 general prosperity ; *.tnJti5iJ^ildfering them unable to pay you their 
 annual tfik, solfmportuiitiy ©A should have/ 
 
 Whereas ^ proper «r$ljef to the West and South by an increase 
 of capit'al^ jji •the*. ifppd; effi’a sound currency, will be like oiling the 
 machinery of your country. Then activity will be resumed ; en- 
 ergies revived ; farm after farm opened up and improved ; shops, 
 mines and manufactories brought into existence; railroads and 
 their business increased; in fact, the now entire dormant wealth 
 of your great and growing West will be earlier and more fully 
 developed; which, you know, friend Jonathan, should be the 
 case, in order the more fully to assist you in liquidating the pon- 
 derous debt you have upon your shoulders. Recollect, .friend 
 Jonathan, that every farm, shop, mine, railroad, road or other 
 improvement, calculated to increase the production of your 
 country, is aiding you to support your heavy debt; is marching, 
 in the true path toward specie payment, and the ultimate liquida- 
 tion of your debt. It may not be the straight cut; but it is the 
 safe one, and will certainly accomplish the object, that is : Save 
 your people from distress, and enable you to collect your revenue 
 promptly by giving your people the means to pay it. 
 
 “ But,” you say, “ this will take me further from specie pay- 
 ment.” True, Friend Jonathan, that is true ; for the present it 
 may really do so. But have you not heard the adage, “ The 
 furthest way around is the nearest way home,” and does it 
 not apply in this instance, when we consider the dangers to be 
 avoided and difficulties to be overcome ? Have you never 
 observed a heedless youth take a short cut across a street regard- 
 less of mud and mire, coming out with clothes ruined, when by 
 winding around and varying his course he might have escaped 
 injury ? Then would it not be best for you to pick your steps 
 and vary your path, in order to cross the chasm that lies 
 between you and specie payment ; to avoid the quicksand, and, 
 perhaps, the destruction of your people's prosperity? Not, in 
 varying your course, to suit (as they may think) a mere set of 
 capitalists and financiers. 
 
Specie Payments. 
 
 3 
 
 If then, Friend Jonathan, you are true to your peo.ple; your 
 whole country ; its real, permanent prosperity — not a fictitious 
 prosperity, but such as creates wealth, (the only one worthy 
 your attention) — you will keep your people employed, or so 
 arrange that they employ one another, actively in all branches of 
 industry. This is not only your duty, but it is the grand secret 
 of all national prosperity. “ Oh ! ” you say, “ this is undoubt- 
 edly my duty, but how is to be accomplished ? ” By affording 
 them sufficient currency to work with and represent their labor. 
 This will eventually take you across the chasm with entire safety 
 to your people’s business and your own ; though it may cause the 
 path to wind and lengthen. 
 
 This, then, is the question : shall your people’s business be cut 
 down to the standard ot' the specie now on hand, or shall the 
 currency be increased to the real business capacity of your 
 country and its people? To you, Friend Jonathan, we look for 
 an answer. No doubt our European neighbors, and their friends 
 in this country — and by these 1 mean those who are now crying 
 specie payment so loudly, and who are using such weighty argu- 
 ments to obtain it — would gladly see you cut down, or even 
 entirely stop, your people’s business by reducing its capacity to 
 your present specie basis, which is not now equal to what it was 
 30 years ago, when you had but twenty millions inhabitants, and 
 now you have forty millions. This course would so effectually 
 cripple and harass your people’s young business, as to close up 
 the various avenues of industrial pursuits ; giving full swoop to 
 Europe in the markets of your country, and that , Friend 
 Jonathan, is the very thing they, and their friends here, are after, 
 and would be glad to see. 
 
 Even to restrain the business growth of your country to the 
 present issue of currency is working distress, and must work 
 immensely greater distress in the future. Your country, Friend 
 Jonathan, must not be measured by the matured countries of 
 Europe in the ratio of its currency, or representative capital. 
 The annual production of the older countries leave them, after 
 deducting the general support, a large surplus which enters into, 
 and swells their active business capital ; consequently their ratio of 
 representative capital increases largely over business and popula- 
 tion. This, you must certainly know, is not the case in your 
 
4 
 
 Specie Payments. 
 
 country. Here the reverse is the case ; millions over the pro- 
 duction and consumption go into the opening up of your coun- 
 try, and other improvements, for which there is no representa- 
 tive capital. For example: say the production of your whole 
 country was four thousand millions per annum, and the com- 
 mon consumption three thousand millions ; this would leave, as 
 you would suppose, one thousand millions that would naturally 
 enter the active business capital of your country. This would 
 be the case was your country once properly developed, and its 
 permanent improvements all made, as in the European states ; 
 but instead thereof, your people have expended two thousand 
 millions during the year in improvements ; thus expending one 
 thousand millions over and above their net income in opening up 
 farms, erecting houses, barns and fences, making roads, railroads 
 and machinery — increasing the wealth of your country every 
 year ahead of their income, in permanently adding to its value, 
 but adding nothing to its business capital. You will find this to 
 be the case, friend Jonathan, if you will examine the assess- 
 ments of your states and counties from year to year ; they will 
 show you the figures on this point. 
 
 Again, friend Jonathan, take the -subject on the basis of popu- 
 lation. Beside the natural increase of your people, they are 
 largely augmented yearly by immigration from every nation of 
 the globe. This immigration being generally comparatively 
 poor, however much it may add to the productive labor, adds 
 nothing to the capital of your country — the medium by which 
 their labor, time, and property is to be computed and adjusted. 
 In England, friend Jonathan, they have 23 to 26 dollars ot rep- 
 resentative capital to each individual of their population. In 
 France it is even greater, being 27 to 30 dollars. When we 
 consider that these countries are small in extent, advanced in 
 improvements, and, if anything, decreasing in population, may 
 we not safely conclude that an equal proportion of capital would 
 not be too much for a country like yours, where everything is 
 yet to be made and done, and whose growth is in its infancy ? 
 But what is the fact? You have barely 15 dollars to the indi- 
 vidual, when you should have more than either of the cases 
 cited ; especially considering the extended boundaries, its 
 rapidly increasing population, unopened condition, and the 
 
Specie Payments . 
 
 5 
 
 amount of work yet to be accomplished. Therefore, 60 dollars 
 per capita is not more than your peo^l^should haye. 
 
 Besides, a scarcity of currency invariably produces a long 
 credit system — the greatest 3 drawback to -active business that 
 can be imagined. It is hot" possible ’th&t cbutracts can be 
 promptly met with a short currency: 'Onh i^'compe^led to wait on 
 the other, or pay ruinous rates fof^bhey*-^ dftetf failing entirely 
 to obtain it. Every commodity is therefore increased in price ; 
 not only is interest charged on purchases on time, but addi- 
 tional charges are made for risk in collection. Thus it is, that a 
 short currency bears particularly heavy on the poorer classes — 
 which constitutes the largest part of your people — enhancing 
 prices, and rendering the means to pay unobtainable — surely no 
 increase, however large, of currency could equal the evils aris- 
 ing from a short currency, in these particulars. 
 
 If, therefore, friend Jonathan, you think with me, that there is 
 a necessity for a largely increased issue of currency, the question 
 recurs, to what extent, how, and in what shape shall the issue be 
 made ? 
 
 To fund a debt as large as yours, friend Jonathan — which yon 
 would be compelled to do, should you attempt specie payment — 
 would but add to the taxes of your already over-burthened people, 
 and largely detract the currency they may have from the legiti- 
 mate channels of business; that is, tie up a large amount in the 
 hands of tax gatherers for no inconsiderable portion of the year ; 
 nor would this plan relieve you to and considerable extent from 
 the harrassing business of providing for interest. Suppose, 
 therefore, friend Jonathan, you fund one-half your debt (as is 
 now proposed) at as low a rate as possible ; that you gradually 
 take up your bonds now held by the national banks and your 
 people, paying for them in currency as you now do to the extent, 
 ultimately, of the remainder of your debt. This amount of cur 
 rency will be none too large ; for it will include the currency now 
 in use; your 3 per cent, certificates ; your 5 and 6 per cent, in- 
 terest bearing notes yet out, and your 5-20 bonds now used by 
 your people in their business for want of currency — and this is 
 very largely done, especially in the South and West. This, with 
 the natural increase of business during the time occupied in grad- 
 ually consummating the plan, will absorb an issue at least equal 
 
6 
 
 Specie Payments. 
 
 to one-half y,ou,r present debt ; every dollar of which will be re- 
 quired, and pt^fi^abfy ttsfeddn tfie business of your people. Of 
 course, I intend that this" i&Siie should be wholly of government 
 paper. * '• < , : * V - ' " i ,<! ! 
 
 And here, Triend Johatbanp,*! 1 ^ r ()uld mention that much has 
 been said of iKtef d.bgh.tflsub^tituting “greenbacks” for the use of 
 the banks in* pld6e l of Mrataatftd-n&l bank issue now in use. Judging 
 from the tone of public opinion on this point, I conclude that the 
 plan meets with some favor ; although there are those who have 
 of late doubted your authority to issue the nation’s favorite cur- 
 rency. I do not propose to argue this subject at present, but 
 shall content myself by taking for granted that which is written, 
 viz., that you, friend Jonathan, “ have the power to coin money,” 
 and regulate the value thereof,” and “that no state shall coin 
 money, emit bills of credit, or make anything but gold and silver 
 a tender in payment of debts;” leaving the very just and obvious 
 conclusion that you have the power to do all these things. 
 
 If, then, friend Jonathan, an increase of currency be made, it 
 seems politic that it should be of the least objectionable form 
 possible. This I take to be the present government issue, viz. : 
 Greenbacks. I am aware the national banks would certainly 
 reject the plan, as they would lose their annual income from the 
 bonds deposited with you as security for their circulation ; but 
 the loss of this income to them is not the least of the gain to your 
 people, which the plan would insure. The simple truth is, friend 
 Jonathan, that you now pay these banks a large income for the 
 very questionable privilege of being god-father to their circula- 
 tion. Why not father it at once, and receive, or let your people 
 receive, the advantage of this income? It would certainly be 
 more fair to your whole people, and they as the ultimate payers 
 are surely the most entitled to the advantage. The banks, friend 
 Jonathan, would have no reason to complain. They certainly 
 should be content with a single profit on their capital, and one, 
 too, fully as large as under the old state system. Twenty-five 
 per cent, is too large. No merchant or other business man ap- 
 proaches it; while few, if any, of the national banks fail to secure 
 it. Let them, then, receive your greenbacks for their bonds, and 
 on this capital do a legitimate banking business. In other words, 
 friend Jonathan, make your banking system free to your people, 
 
Specie Payments. 
 
 1 
 
 and let them be the loaners and not the issuers. Then capital 
 will, like water, seek its own level, and find its way to every 
 point of demand. 
 
 Another very important matter is the loss by fire and marine 
 accidents and ordinary wear and tear which annually occurs in 
 a large and widely spread circulation. This, friend Jonathan, is 
 immensely greater than most persons have an idea of, and only 
 those acquainted with the subject can imagine the great gain 
 accruing to banks from this source. Such persons will readily 
 agree with me that 3 per cent, is a low estimate of the annual 
 loss. This, then, is another gain to the banks to be transferred 
 to your treasury; and in so large a currency, extending over so 
 vast a territory, it is safe to conclude that the gain will be 
 greater even than my estimate. On this point it may not be out 
 of place for me to give the actual experience of a small bank, 
 operating under the State system, in the interior of Ohio, cover- 
 ing a period of eleven years. The bank, at the end of this 
 period, found their gain to be twenty-two per cent, in the actual 
 loss of its circulating issue ; this, too, without any exclusive or 
 particular cause, other than the ordinary wear and tear. 
 
 Taking your debt at the present time, in round numbers, to be 
 twenty-four hundred millions, the interest of the one-half at Tj- 
 per cent, will be fifty-four millions annually. The loss on 
 twelve hundred millions — the amount of currency in circulation 
 among your people — at 3 per cent, will be thirty-six millions to 
 be placed to your credit as so much gain ; this makes the larger 
 portion of the fifty-four millions interest on the other or funded 
 half of your debt, and to this extent relieves your people of 
 taxation. You see, friend Jonathan, by this you not only save 
 fifty-four millions interest on the half of your debt not funded, 
 but 3arn thirty-six millions by its use; making a difference of 
 ninety millions in your annual statement from the present state of 
 affairs. It is no objection to this plan to say, that the loss can 
 not be ascertained without calling in all currency; it can be 
 calculated with sufficient accuracy, and other paper issued annu- 
 ally to keep up the maximum. 
 
 There is yet another advantage, friend Jonathan, which the 
 greenback has over the national bank system ; and that is in 
 attempting specie payment. The plan proposed that national 
 
8 
 
 Specie Payments. 
 
 bank paper shall be redeemed, not only at its own coun- 
 ter, but at some particular place foreign to the bank, is 
 in itself a measure that will cause constant commotion 
 and fluctuation in the currency. Not only would a large amount 
 be taken from circulation in transit to and from the point of 
 issue and redemption, but it would be an actual tax on business 
 entirely uncalled for. It is not probable that the banks would 
 be in equal standing at the place of redemption, and conse- 
 quently a classification of banks would be the result ; which 
 classification would necessarily extend to the issue in circulation. 
 All this, friend Jonathan, would go to lessen the confidence of 
 your people in the banks, and millions would have to be 
 redeemed from this cause alone, which would never be required 
 if the issue were your own. 
 
 Again, friend Jonathan, when redemption comes on, you will 
 find almost the entire national bank issue disappear from circu- 
 lation. They cannot possibly extend the accommodations they 
 now do. Self-protection will compel them to withdraw their 
 issue to the standard of the specie they may be able to procure. 
 In the struggle for specie each will force the other to redeem in 
 order to secure its own circulation. Then will be presented the 
 lamentable spectacle of the larger ones swallowing the smaller 
 ones, while the currency of the country remains securely locked 
 up in the vaults of the banks, and the people unable to move hand 
 or foot without it. What difference would it then make whether 
 the country had five hundred millions or two thousand millions 
 of currency ? How much do you suppose could be procured at 
 reasonable rates for business purposes? Just so much as the 
 “rings” and combinations, sure to be inaugurated, would allow 
 the banks to retain specie to represent, and not a dollar more. 
 
 On the other hand, friend Jonathan, were you the author of the 
 currency, such is, and would be, the confidence of your people, 
 that specie payments could be established with vastly less specie 
 than by any other possible plan. The excitement which would 
 naturally follow in the commencement once over, I am confident 
 that one dollar in ten would meet all demands on you for specie; 
 and, except for change, it would only be required for customs 
 and to pay balances in foreign countries; the currency itself 
 being legal tender for all other purposes ; the facilities for your 
 
Specie Payments. 
 
 9 
 
 people obtaining specie could be regulated at your treasury, and 
 its various branches, established as the requirements of business 
 may demand. I am, of course, presuming that effectual meas- 
 ures will be taken to prevent all rings and combinations from 
 interfering with the legitimate demand ; and who, friend Jona- 
 than, can so perfectly regulate this matter as you yourself? It 
 is well known that in other countries effectual checks exist against 
 any efforts to embarrass governments in their specie movements ; 
 confidential reports are daily made on this subject to the proper 
 authorities, so that no specie can arrive or depart without gov- 
 ernment being advised thereof. Thus it is that they are con- 
 stantly advised of the amount of specie in circulation among 
 their people, and are ready at any moment to interpose obstacles 
 in the way of all combinations that may be formed. There cer- 
 tainly is no valid reason why you, friend Jonathan, should not 
 exercise the same care over this very important part of your 
 people’s interest. It is no objection to assert that officers them- 
 selves would use their official position in a shameful prostitution 
 of their trusts ; the same objection applies to any other depart- 
 ment of government, protected by the usual oaths and other 
 moral restraints. If this course would have no other effect, it 
 might at least save us the disgrace attending certain “ investi- 
 gations .” 
 
 Before leaving the subject of redemption, I am constrained to 
 state, friend Jonathan, that in my opinion you have been work- 
 ing at the wrong end of the matter. Almost every proposition I 
 have seen contemplates reducing the currency to meet the specie, 
 instead of raising the specie to meet the currency. With a view 
 to the future I take it that this is not good policy. I have seen 
 it estimated that in thirty years your population is likely to be 
 one hundred and ten millions. You certainly must see that by 
 that time you must be prepared to carry an immensely increased 
 currency ; yet no means have been devised to secure the specie 
 upon which to base this issue. The amount now in your country 
 is, comparatively, trifling ; yet you have the largest gold and sil- 
 ver producing country in the world, and sufficient has been pro- 
 duced in the last twenty years to pay almost your entire debt in 
 coin. What has become of it ? Why, sir, the freight list of every 
 departing vessel will tell you — gone to support the labor and en- 
 hance the capital of other countries. 
 
10 
 
 Specie Payments. 
 
 At present, friend Jonathan, you have nothing but your customs 
 to depend on for specie; and do you think you get from this 
 source all the revenue you should have from it? Far from it? 
 What with the smuggling along your extensive coast, and the 
 fraudulent ad valorem duty invoices, I doubt if you get a moiety 
 of it ; at least the loss is very much greater than you imagine. 
 The facilities for smuggling were exhibited in the late war, when, 
 with a rigid blockade, your southern coast was repeatedly pen- 
 etrated. What, think you, is the case, now that your whole 
 coast is exposed, as always has been the case in time of peace? 
 If, then, this is the only source from which you must derive your 
 specie, would it not be well to see that you get all you are entitled 
 to from it? — especially when, through your army and navy, you 
 could do so without much, if any, additional cost? It is not 
 alone the loss of millions of revenue, but a means of removing 
 vast sums of specie not enumerated in that unhappy balance of 
 trade, which, friend Jonathan, is always against as. 
 
 But, friend Jonathan, even with the present amount received 
 from customs — which I believe is about one hundred and sixty 
 millions annually — it would be easy to pay i he interest on the 
 funded half of your debt, and leave a surplus of one hundred 
 and six millions; this added to the specie which could be pur- 
 chased with the gain secured fror$ the annual loss of currency, 
 and your income from other sources, (public lands, etc.), would, 
 after paying the necessary expenses of carrying on the gov rn- 
 ment, leave an annual surplus of over one hundred mil ions of 
 specie on hand ; so that in three years you would have a specie 
 basis of one dollar to four on twelve hundred millions of cur- 
 rency — which I believe has always been considered an ample 
 and sufficient basis. The proposed plan of paying o'ne-half your 
 debt in currency, besides working a great convenience to \ ou, 
 friend Jonathan, helps your people to a currency of a nature the 
 most acceptable to them, and one too, which must always remain 
 so. In a country like yours, currency of some kind must always 
 exist. In order, therefore, to render equal justice to both the 
 the creditor and debtor classes, it should be of the same nature 
 as weights and measures — whose tangible representative it 
 really is — that is, it should never vary in value, and least of all 
 should the issuing of it be made a money making business for 
 
Specie Payments. 
 
 11 
 
 companies and corporations ; this at once creates a speculative 
 currency — the bane of all honest business. 
 
 But, friend Jonathan, all speculations, theories, and plans 
 respecting financial matters amount to nothing in the end, so 
 long as each year bring it heavy foreign balances against you, 
 half of which your custom houses are strangers to. I care not 
 if you start to-morrow with dollar for dollar in specie, you can 
 not continue to pay it for any length of time, with the imports 
 of your country exceeding its exports. It certainly is not 
 necessary for me to enter into an argument to prove this posi- 
 tion, or the other fact, that the balance of trade is, and has been, 
 against us. I have already stated that your production of pre- 
 cious metals exceeds that of any other country — in fact of many 
 countries combined — and nothing but the retention of it is 
 wanting to make you the richest nation, in this regard, on earth. 
 It matters not how, or by what party, this is accomplished ; but 
 accomplished it must be before you can proclaim yourself an 
 independent nation. This thiug is likely to prove worse in the 
 future than it has in the past. Already the cry is, “ No market 
 for our crops in Europe,” and the disposition to import is, if 
 anything, increasing. To me there appears to be a national hal- 
 lucination on this subject. Neither the history of other coun- 
 tries, nor the present condition of our own, seems to have the 
 least influence on our legislators; they, it appears, must needs 
 run things to a crisis though the devil drives. 
 
 Is it not time, then, friend Jonathan, that we become a little 
 more Americanized — that we remember there is such a place as 
 the United States, and that its interests are not always the 
 interests of Europe ; or shall we continue to give heed to the 
 counsel of the agents, paid and otherwise, of Europe ? 
 
 What say you, friend Jonathan ? Suppose you submit it to 
 you father, Uncle Samuel, and oblige an 
 
 Old Citizen. 
 

 
 
 
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