Mr. Chairman and Fellow-Citizens: — The merchants and business men of Cincinnati have greatly honored me by inviting me to address the people of Ohio as an advocate of honest money. For that honor I offer them my sincere thanks. In obedience to my own sense of duty I have accepted that invitation, deeply sensible of the magnitude of the question and the far-reaching importance of the declaration of sentiment which the people of Ohio will soon be called upon to make at the ballot-box.
But before proceeding to discuss the issues of this contest, I owe you a preliminary statement of a personal nature. I am told that my appearance in this campaign has been represented as part of a concerted plan to lead the independent voters of the country into the ranks of the Republican party, and to commit them to the support of its candidates in the Presidential election of 1876. That story is an idle invention. I know of no such plan. If it existed, I would not be a party to it. The independent voters have minds of their own, and I respect them too much to believe that they can be transferred to this or that side by any individual or combination of individuals. Besides, I not only do not seek to commit anybody else as to the Presidential election of 1876, but I do not mean to commit myself. I reserve to myself entire freedom of judgment on that matter, to be exercised when the exigency will arise, and I advise everybody else to do the same. My relations to the Republican party are no secret. I have deemed it my duty, as a Senator and as a citizen, to combat the errors and transgressions of the set of politicians that controlled it and to attack the abuses grown up under its rule. I was in earnest. I thought I was right when I did so, and it is no mere stubbornness of opinion when I say I think so now. Not only have I nothing to retract, but I am sure recent developments have convinced many good, conscientious Republicans, that, had our appeals been heeded in time, that organization would have saved itself many humiliations.
It is, therefore, no sentimental partiality for the Republican party that brings me here. Whether the Republican party will put itself in a position to deserve support in the Presidential election of 1876 remains to be seen. Whether the Democrats will do so, remains to be seen also. My opinion has long been, and I have not concealed it, that the patriotic men of the Republic might do better than depend upon either. That well meaning citizens should so frequently have found themselves compelled to support one party, not because it had their approval and confidence, but because the other party appeared still worse, is not only a condition of politics unworthy of a free, intelligent and high-minded people, but one of the most prolific sources of the corruption and demoralization of our political life. In that situation we have been for years; and there is now something going on in Ohio which threatens to continue that state of things for the year 1876 only in an aggravated form.
Proclamation has been made by the Democratic leaders of Ohio that this State campaign is to be of decisive effect as to the issues of the Presidential election of 1876, and in the very front of these issues, conspicuous before all others, they have placed one which involves not only the material interests, but the character, the good name, the whole moral being of the American people. An attempt is being made to secure the endorsement by the people of the greatest State of the West, one of the greatest States in the Union, of a financial policy which, if followed by the National Government, would discredit republican institutions the world over, expose the American people to the ridicule and contempt of civilized mankind, make our political as well as business life more than ever the hot-bed of gambling and corruption and plunge the country into all those depths of moral and material bankruptcy and ruin, which, as all history demonstrates, never, NEVER fail to follow a course so utterly demented in its wickedness.
The advocates of inflation in this State, as they themselves give us to understand, expect, if the people of Ohio by the election of the Democratic candidates declare their approbation of that financial policy, that the inflation fever will, under the stimulus of such success, sweep like wildfire over the Western and Southern States, overwhelm and subjugate the Democratic National Convention next year, dictate its policy and its candidates, and in 1876 put an inflation party into the field strong enough to defy opposition. I candidly confess I see good reason to apprehend such consequences. I do indeed not undervalue the importance of the manly, honorable and patriotic condemnation pronounced by the Democratic convention of New York upon the doctrines preached by their Democratic brethren here. It was an act deserving the grateful applause of every good citizen. But I doubt very seriously whether that act will stem the flood, if the inflationists in Ohio are successful. Pennsylvania has already followed them. It is but too probable that the sectional feeling which the inflation movement strives to excite in the West and South against the Northeast will be inflamed to more intense bitterness, and that the financial question will be used as a new agency to revive the curse of sectional warfare in our politics.
Let us indulge in no delusion. The success of the inflation party in Ohio will be the signal for a general charge along the whole line to submerge the best principles and leave helpless in the rear the best leaders of the Democratic party, and, spurred on by a reckless demagogism, to capture the national power by a tumultuous rush. This is no matter of mere local concern as some weakly pretend to believe. It is a national danger, which all good citizens should unite to avert, and which can surely be averted only by the defeat of the inflation party here. I repeat, therefore, I have not come here to whitewash the faults of the Republican party, to apologize for its shortcomings, or to serve its ambitions. But here is an incalculable mischief, threatened by the other side, to be prevented, and I simply try to do my duty, as I understand it.
I beg leave to address my remarks directly to the Democrats of Ohio. In view of our former relations, I trust they will not for this direct appeal accuse me of any impropriety. When I, as an independent man, in the Senate and before the people, advocated a policy of conciliation and justice with regard to the South; when I attacked official corruption and transgressions of those in power; when I denounced violations of the principles of the Constitution perpetrated by Republican officers of State, you, my Democratic fellow-citizens, lavished upon me expressions of applause and confidence, for which I was duly grateful.
But Democratic inflationists seek to discredit my good faith by the accusation that I have changed sides. Let us see: In 1872 I stood before you as an advocate of the "Liberal" ticket, which had also been adopted and was supported by the Democrats. That ticket was nominated upon a platform containing, as an essential part of its political faith, the following resolutions:
The public credit must be sacredly maintained, and we denounce repudiation in every form and guise.
A speedy return to specie payment is demanded alike by the highest considerations of commercial morality and honest government.
That platform was solemnly indorsed and adopted as the political faith of the Democratic party by their National Convention at Baltimore. Upon that platform I stood then, and upon it I faithfully stand to-day. Democrats, where are you? In making that declaration of principles, I was in earnest. If your leaders betrayed their declared faith, what right have they to accuse me of deserting my cause, when I resist its betrayal by them? Again, they pretend that from opposition to President Grant I have turned round to speak for him and promote his reëlection. Let us see. In the verbatim report of a speech made by Governor Allen at Mansfield I find the following language:
I have some reason to believe, and not a small reason either, that Grant, in his secret heart, wants the Democracy to carry Ohio, in order that it may be said by his partisans: Now, no other man can rescue the country but Grant; therefore, we must have Grant.
You, Democrats, will certainly not accuse your candidate for the governorship of telling a deliberate untruth. If he says he has good reason to believe that President Grant desires the Democracy to carry Ohio, then, of course, his reasons must be good. We have Governor Allen's word for it. Now I, for my part, do not wish to see President Grant's secret desires gratified on this point. I am as honestly and earnestly as ever opposed to President Grant's renomination, and, therefore, I am honestly and earnestly opposed to the furtherance of that renomination by the success of the inflation Democracy in Ohio. If there are any Grant men in this campaign, they are those who advocate Governor Allen's election, not I.
The truth is, there were a set of Republican politicians who thought they could permit themselves any iniquity if they only raised the cry of "rebel." There seem to be now a set of Democratic politicians who think they can permit themselves any iniquity if they only raise the cry of "Grant." I opposed the former as false pretenders, and upon the same principle I oppose the latter. For it is my sincere conviction that there is just as little danger of the reëlection of President Grant as there is of a new rebellion, while there is real and great danger in the tricks of wily politicians, who strive to hide their mischievous schemes behind what they believe a popular cry.
No, my Democratic fellow-citizens, I have not changed sides. I stand upon the same ground which I occupied when you cheered my utterances. I advocate the same principles and serve the same ends. To the same sentiments which then you so loudly applauded I ask you now to give a patient and candid hearing.
As Democrats, you profess to be above all in favor of two things: First, the strictest maintenance of the limitations of governmental power as an indispensable safeguard of free institutions; and second, an honest and economical conduct of our public affairs. Its fidelity to these two things is the particular boast of the Democratic party, and upon this fidelity it bases its claims on popular confidence and support. As to the necessity of these two things we fully agree. In fact it was while contending for the maintenance of the Constitutional limitations of governmental power, and for the restoration of honest and economical government, that the Independents broke with the controlling influences of the Republican party, for which you applauded us so loudly.
Now, I protest that we were in earnest and in good faith in that struggle, actuated, not by any motives of small personal spite, but by a sincere solicitude for the integrity of republican institutions and the public good. And being in earnest and in good faith, we must recognize our duty to defend that cause against whatever power, whatever party may imperil it — against Democrats no less than against Republicans.
Were you, Democrats of Ohio, in earnest and in good faith also, when you represented the strictest limitation of governmental powers and hostility to corruption and extravagance as your pet principles? Examine your present attitude. You adopted in your State convention a platform insisting upon an augmentation by the General Government of its irredeemable paper currency. And now I assert that those who advocate an inflation of our irredeemable paper currency, although calling themselves Democrats, are advocating an assumption and exercise of power by the Government far more overreaching and dangerous, and a corruption and profligacy far more demoralizing and oppressive than any we have so far experienced. If I make good that assertion, you will not be able to deny that your Ohio platform is a reckless and barefaced abandonment of the very principles the Democratic party pretends to be proudest of.
But, before proceeding to this demonstration, I must notice an evasion resorted to by some Democratic leaders, who seem to feel the soreness of that point. Here and there the pretense is put forth that the Ohio platform does not mean an inflation of our irredeemable paper currency at all, but merely an adaptation of it to the wants of trade. This argument is used to calm the apprehensions of those who recoil from naked inflation and the prospect of ruin it opens. Never was a deception more insidious.
Democrats, let us be candid as serious men, and have at least the courage of our opinions and purposes. Let us throw aside the art of the juggler when the highest interests of the people are at stake. What does the Democratic platform say? It states that the contraction of the currency wrought by the Republican party — which contraction, by the way, is only imaginary, as every well-informed man in the country knows — has brought about the present depression of business; and having made this statement the platform proceeds to propose "to make and keep the volume of the currency equal to the wants of trade."
What does this mean? If anything, it means that the volume of the currency has been reduced so much as to fall short of the wants of trade; that it must be "made" equal to those wants, and that can be done by issuing more of it; and that it must be "kept" equal to those wants, and that can be done only by issuing still more of it from time to time, as the volume put out may not have effected the purpose.
Every child in the country can understand the meaning of such language, and I wonder with what faces "honorable gentlemen" can stand up before an intelligent people feebly quibbling about a turn of phrase which has no meaning at all if it does not mean inflation. But it means not only inflation by a single act and to a fixed amount — it means inflation continuous and indefinite.
The volume of the currency is to be "made and kept equal to the wants of trade." Is not the volume of the currency equal to the wants of trade now? It is a fact as notorious as daylight that the banks of the country, especially in the centers of trade, are full of money that lies idle for want of employment. No intelligent man questions this fact. To any candid mind this would conclusively prove, not that the volume of currency is unequal to the wants of business, but that the business of the country is unequal to the volume of the currency.
But no! say the inflationists. It does not prove that the volume of currency is equal to the wants of trade; for, although there may be a superabundance of money in the banks, there are a great many people who want money and cannot get it.
To candid common-sense, this again would prove, not that there is a lack of currency, but that there is a want of confidence which deters those who have money from embarking in business, and from lending money to those who need it.
This want of confidence is to be overcome. How do the inflationists propose to accomplish this?
On this point we obtain some information from their chief, Governor Allen, who is by the Democratic party of Ohio charged with the great office of leading the country out of all its financial difficulties. I have studied some of the speeches of that venerable gentleman, which, I must confess, filled me with wonder and amazement. No words can do him justice but his own. In a verbatim report of his speech delivered some time ago at Marietta, I find the following language:
These men [meaning his opponents] go about and cry there is too much money in this country. I wish to God we could find some of it. [Laughter.] They say it is in the banks. Is it? It might just as well, for the purposes of money and currency, be in the bottom of the Pacific Ocean, for if it is not in circulation, it is no more money than so many cornstalks would be. To be money it must circulate as a medium for carrying on the exchange of the country.
This, then, is Governor Allen's doctrine. I do not wish to speak harshly of the venerable gentleman, who, no doubt, possesses many estimable qualities, and far be it from me to cast any slur upon his character as a man. But standing there as one of the great leaders whose wisdom the people are called upon to trust for the management of their most important interests, his expressed opinions challenge scrutiny. Now, I must confess, among all the glaring absurdities with which the inflation school of financiers has been flooding the land, I find none equal to this theory of Governor Allen's in brilliancy of nonsense. It deserves to be recorded and transmitted to posterity as one of the immortal utterances of the financial statesmanship of this period.
Only think of it. Money in bank is no money at all for business purposes, because it is in bank! The great leader of the Democratic party of Ohio, which asks the people to vote for him on the very ground of his financial principles, does not know yet that in this civilized country only about seven per cent. of the business transactions are accomplished by an actual transfer and delivery of currency from hand to hand and that fully ninety-three per cent. of those transactions are effected by the transfer of bank accounts through checks, notes and bills of exchange. He does not know that ninety-three per cent, of the circulation of money in this country is effected through those very banks, which he likens to the bottom of the Pacific Ocean! He does not know yet that, in the progress of civilization, we have passed that ancient period of barbarism when a business man carried his treasury in his wallet and his counting-room in his hat!
It seems almost incredible in this nineteenth century, and yet this very absurdity is the basis of all the reasoning of the inflationists, and Governor Allen is only the blunt but the true representative of the ideas of his followers. Believing, or pretending to believe, that money in bank is lost to circulation and no longer performs the office of money, they strive either to force that money out of the banks, or to issue more which will not go into the banks. They decide at once for the latter course.
Now, suppose more of our irredeemable greenbacks be issued. No matter who gets them, the first thing the people who receive them will do is to go straightway and deposit them in banks — all except Governor Allen. "Hold on!" cries he, "that will never do! You are destroying your greenbacks for all purposes of money and currency! You are throwing them into the bottom of the Pacific Ocean." And he sagely proceeds to stow his away in an old stocking or an earthen pot under the bed, for circulation; for, if he lends his money to anybody, or pays it out in a business transaction, the man who gets it, if it is a considerable quantity, will forthwith deposit it in a bank, and even if paid out in small sums, it will eventually get there.
Yes, this is a perverse age when people will insist upon depositing their money in banks. "Now," Governor Allen will say, "this experiment not having answered, the great mass of this new issue of greenbacks having gone into the banks, or which is the same thing, into the bottom of the Pacific Ocean, of course, we must issue more greenbacks, and more and more, until the money stays out of the banks." And, finally, Governor Allen would accomplish his purpose — that is, when the greenbacks will have become so utterly worthless that it will no longer be of any use to deposit them in banks at all. Then, I suppose, the greenbacks would, in his sense, be "better than cornstalks"; they would, at last, "serve the purposes of money and currency," and really "circulate as a medium," according to Governor Allen's enlightened financial conception.
This would, as Governor Allen gives us to understand, be "making and keeping the volume of the currency equal to the wants of trade," in pursuance of the Ohio platform. I desired to prove that the Ohio platform means inflation. Will any follower of Governor Allen deny it yet?
But, O citizens of Ohio, I ask you now in all soberness, would it not be a burning shame for the people of so great a State, an intelligent, educated people, at a critical moment, when so much depends upon their decision, to designate a man, who claims their votes just because he is the exponent of such a policy, as their chosen chief, thus putting the seal of their approbation upon financial theories so utterly absurd and childish as to become the laughing-stock of the world wherever they are mentioned! I earnestly hope the people of Ohio will think better of themselves.
Some Democratic speakers pretend that the policy of "making and keeping the volume of the currency equal to the wants of trade" may, in the sense of the Ohio platform, under certain circumstances mean, instead of inflation, a reduction of the currency, namely, when it appears that the volume of currency is in excess of the wants of trade.
When will the excess be admitted if it is not admitted now, while large quantities of money lie in the banks idle for want of employment, and that paper money at a heavy discount as to gold? If now the wants of trade are considered to require still more currency, under what circumstances will they be considered to require less? It is easy to show that as you go on increasing the currency the demand will not be satisfied, but it will be still more excited.
One thing is universally admitted: If the volume of our irredeemable paper money is increased, it will further depreciate. The paper dollar, which is worth 85 cents in gold now, will be worth 80, or 70, or 60, or 50 cents, then, and what you can buy for one dollar in paper now will cost $1.25, or $1.30, or $1.40, or $1.50 then.
As the paper money depreciates and loses in purchasing power, its power of effecting exchanges will decrease in a corresponding measure. A transaction requiring the use of $100 now will require $125, or $130, or $150, then. What follows? The increased quantity of the currency bringing with it no increased power of effecting exchanges, in consequence of corresponding depreciation, you are, after the increase, just as far from satisfying the supposed wants of trade as you were before. You try further expansion, and the result will be exactly the same. You go on trying in that way to make the volume of currency equal to the wants of trade, and the inflation will be indefinite, until finally the currency becomes so worthless as to effect no exchanges at all, and the whole edifice tumbles down in universal repudiation, bankruptcy and ruin.
Is there any advocate of the Democratic platform who can gainsay this? If not, then let us hear no more about that platform not meaning inflation. It means inflation indefinite, unlimited, until the currency is utterly worthless.
Besides, you need only listen, not to the trimming apologizers, but to the real makers and exponents of the Democratic platform, and you hear nothing but the roar for "more money! more money!" If it did not mean inflation, it would have no value at all to them. To quibble about it is not only a useless, it is simply a ridiculous attempt at evasion. The inflationists of Ohio themselves will laugh at you, did you tell them that the platform does not mean "more money; much, very much more money!"
Now let me return to the point from which this was a digression. I affirmed that those who advocated an inflation of our irredeemable paper currency, pretending to be Democrats, are advocating an assumption and exercise of power by the Government far more overreaching and dangerous, and a corruption and profligacy far more demoralizing and oppressive than any we have yet experienced, thus betraying the very principles the Democratic party puts in the foreground in soliciting the confidence and support of the people.
First, then, as to the limitation of governmental power.
You, my Democratic friends, insist that a strict limitation of the powers of government, according to Constitutional principles, is the most essential and indispensable safeguard of popular liberty and free institutions. I contend for the same doctrine. But you insist, also, that our irredeemable paper currency shall be augmented according to the supposed wants of trade. And who is to determine what the wants of trade are and to what extent the volume of currency shall be augmented? Of course, the Government. Have you considered what that means?
In specie-paying times the amount of coin circulating in a country is regulated by the circumstances of business. If there is more than finds profitable employment, it will flow out and go where it finds a better market. If there is less than the wants of trade require, it will become dear and flow in from countries where it is cheaper.
The issues of a well regulated banking system, based upon specie, will conform to the same rule. Temporary disturbances, brought on by panics or artificial operations, may arise, but on the whole the rule holds good. The Government has no arbitrary control whatever over the value of the currency. It sees to it that the coin struck in the mint be of the prescribed standard value; it punishes counterfeiting; it regulates the banking system so as to make it safe. And then it lets currency and trade in their relations take care of themselves. That is sound Democratic and also sound financial principle and practice in the true sense of the word. There the Government is reduced to its proper functions.
But how is it where an irredeemable paper money prevails? There the volume of currency is not regulated by the circumstances of trade. The paper money not having outside of the country that value which specie possesses, it does not flow out and in as the needs of business may require; the quantity the country shall have is determined by the arbitrary will of the Government.
This is a power of awful extent and significance. It is not disputed that the value, the purchasing power of an irredeemable paper currency is affected by the quantity in circulation, and that other circumstances, such as the confidence of the people and solvency of the Government, remaining the same, an appreciable expansion of the currency will result in its depreciation, and vice versa. But as the currency changes in purchasing power, so the money value of all you possess, and all you have to buy or to sell, changes also; so that the power of the Government to determine the quantity of currency that shall be in circulation is virtually equivalent to the power, by its own arbitrary act, to increase or decrease the money value of all private property in the land; in other words, the private fortune of every citizen is placed at the mercy of the Government's arbitrary pleasure. You cannot venture upon any business enterprise, you cannot sell or buy a lot of merchandise on time or even for cash, you cannot make a contract involving the outlay or payment of money, but the Government will have the power to determine whether it will be to your profit or loss, and perhaps in extreme cases whether it will make you rich or bankrupt. This, then, is the awful power of a government intrusted with the office of "making and keeping the volume of currency equal to the wants of trade." You may ask me: Cannot the Congress of the United States be depended upon to exercise such a power with wisdom and discretion? The Lord preserve us! The wisest assembly of financiers in the world would be unable to discover any other means to make and keep the volume of currency equal to the wants of trade, than by a return to a specie basis where trade and currency may adjust themselves. But Congress! Give us the most honest and intelligent Congress we can ever expect to be blessed with, and the adaptation of the volume of an irredeemable paper currency to the ever-changing wants of trade by annual legislation will be found an utter impossibility. But now imagine a Congress controlled by statesmen like Governor Allen, who think that more and more currency must be issued until the money of the country stays out of the banks; or imagine a Congress manipulated by a ring of unscrupulous and adroit financial sharpers, and such a Congress wielding the tremendous power of changing at pleasure the current value of every dollar and every dollar's worth of property you have — does not your head swim at the prospect? And yet that is the power wielded by any government, intelligent or idiotic, honest or rascally, which is charged with the office of "making and keeping the volume of irredeemable paper money equal to the wants of trade."
You, my Democratic friends, say that it was not you who conferred such a power upon the Government by the creation of the irredeemable paper money. That is true enough. It was done under the pressure of the extreme necessities of the civil war by Republicans. But does that change the question? Previous to that civil war you would have found among the great statesmen of the Republic scarcely a single one who would have admitted the Constitutionality of an act of Congress making any thing but gold and silver coin a legal tender. I know well that the Supreme Court, after the war, did consider such an act justified by the extremity of National danger. But now the National danger is over. We are at peace. The North and the South have shaken hands in renewed friendship. No foreign enemy threatens our shores. All National danger, with what justification it might afford of exceptional measures, has vanished.
And now you, Democrats of Ohio, propose to continue that awful power of the Government inseparable from an irredeemable paper money system — nay, you propose to perpetuate it, — for what purpose? Not to defend the life of the Republic against armed aggression, but to produce certain effects upon the business of the country. You not only admit that power of the National Government to change at will all current values in the country, to dispose of the private fortune of every citizen at its arbitrary pleasure — nay, in the face of the efforts of others to strip the Government of a discretion so despotic, you insist that that power shall be exercised by what you euphoniously call "making and keeping the currency equal to the wants of trade," by the interference of Government. And you still call yourselves Democrats, and claim the confidence of the people by your fidelity to the great principle that popular liberty and free institutions must be secured by a strict limitation of the powers of government!
When President Grant trifled with the war-making power in the San Domingo case, I with others denounced his action as a transgression of his Constitutional authority, and you applauded. When the Ku-Klux act was passed, when an act of usurpation setting up an illegal government in Louisiana was countenanced and aided by the Administration, when the Federal military invaded the legislative hall of that State, I was among those who protested against such unconstitutional assumptions of authority. Step by step we fought against what appeared as an advance of dangerous centralization. And you applauded.
But now I declare, those unconstitutional assumptions and those centralizing attempts appear as mere trifles compared with the arbitrary, despotic character of that power to kick the fortune of every citizen about as the football of its whims, which you, Democrats of Ohio, according to your platform, not only recognize as belonging to the Government, but attempt to fix upon the Government as a permanent system, by making its abolition simply impossible. Nay, you insist that such power SHALL be actively exercised. If that is Democracy, then, I entreat you, trifle no longer with the intelligence of the people by pretending that a strict limitation of the powers of government as the indispensable safeguard of popular liberty and republican institutions is an article of your creed. If the great men of the past, whom you delight in calling the founders and apostles of your party, the men whose recorded opinions on this momentous question are plainly before you, if Jefferson, Jackson, Silas Wright, Benton could rise from their graves and hear the Ohio platform called a true exposition of Democratic faith, ah, how their eyes would kindle with scorn at the barefaced imposition, and how they would spurn with their heels the bastard offspring! — So much for inflation as the source of an arbitrary, despotic power, incompatible with free government. So much for the betrayal of the cardinal principle of Democracy by the Democrats who advocate it.
Now, a word about inflation as the source of corruption and profligacy. You, my Democratic friends, profess to contend for frugal, economical, honest, pure government. So do I. Is there a single candid man among you who sincerely believes that frugality, economy, honesty, purity of government can be promoted by an expansion of our irredeemable currency, or is even in any way compatible with it?
Let us look at a plain, practical side of the question. It has frequently been asked: How are you going to get your additional greenbacks afloat? The query seems to have caused some embarrassment, and the answer has usually been: Oh, we shall get it out somehow. But there is no need of indefiniteness. The matter is capable of precise statement. Obviously, there are two ways to set additional currency afloat. One is by buying up United States gold-bearing bonds in the market, or by buying gold to pay off bonds as they fall due.
But it is certain that this method will answer only in a very limited measure, for this simple reason: As you put out new greenbacks, with the prospect of a large emission, the greenbacks will rapidly depreciate as to gold; and as the bonds are payable principal and interest in gold, they will maintain their gold value, and their price in paper money will thereby become so high that the method of putting out greenbacks by purchasing bonds will soon become very unpopular and be dropped. Or, if you mean to repudiate the bonds, of which, as I understand, there is at present no declared purpose, then, of course, you will simply repudiate them, and not buy them up at all.
But there is another way to put afloat new issues of greenbacks; it is by carrying the expenses of the Government beyond its revenues, and this, I have no doubt, will be resorted to as the favorite method. Do you know what that means? Imagine a Congress making appropriations of money for the avowed purpose of getting out, putting afloat, spending, as much money as possible, adopting systematic extravagance in expenditures as a necessary measure of financial policy to the end of "making and keeping the volume of currency equal to the wants of trade." What a day of jubilee there will be among the thieves and rascals, who think they can gain not only wealth, but respectability, by stealing as much as possible of the public money! Let it be known that ditches must be dug, that embankments must be thrown up, that mountains must be tunneled, that railroads and steamboat lines must be subsidized, for the very purpose of spending money that "the volume of the currency be made and kept equal to the wants of trade," — what a harvest of jobs, what a crop of rings this blessed country will bear! What a glorious time for enterprising contractors, what a seductive season for Congressmen to help a friend for a little share in the profits, what a carnival of fraud, what a flying about of stray millions! For, mind you, money will be no object; on the contrary, it must be spent, and the more spent the better, for the greenbacks must be got out, in obedience to the mandate, "to make and keep the volume of the currency equal to the wants of trade."
No, fellow-citizens, this is no jest. This is no exaggeration. You adopt a financial policy making it the duty of the National Government to put out new issues of currency in any way that will serve the object quickest, and unlimited extravagance will be the necessary, the inevitable consequence. There never was a state ever so well administered, there never was a people ever so frugal, there never was a government ever so careful, which did not, by the emission of large quantities of irredeemable paper money, run in the vortex of profligacy and corruption. It has never been, it will never be, otherwise. It is in the very nature of things. When you manufacture this so-called money by merely printing a few words on a slip of paper, it apparently costs nothing. You are deluding yourselves with the idea that you are creating wealth, without stopping to think of the ultimate day of reckoning which demands the settlement of accounts. When you spend such money for the very purpose of getting it out, the wildest extravagance is unavoidable, and the extravagance of a government always is the very hot-bed of peculation and corruption. The rings will thrive, and the honest men will pay the cost. But not only the Government and its officers does it corrupt; still more grievously will it demoralize the people. When, by the fluctuations of so vicious a monetary system, the possessions of everybody become uncertain from day to day, every man of business will, by the very force of circumstances, be made a gambler. What is worth some thing to-day and may be worth nothing to-morrow is lightly made the football of chance, and when everybody, to save himself, sees himself forced to overreach everybody else, the principles of honesty are easily forgotten. The sting of necessity stimulates unscrupulous greed, and the general example silences the voice of conscience. Honest labor appears as fruitless drudgery, and to live upon one's wits becomes the order of the day. The history of nations is full of pertinent warnings. American society can escape such a fate just as little as any other, if we flood this country with that kind of money which in its very nature carries the poison of false pretense and seduction.
My Democratic friends, we have seen in our days many startling cases of embezzlement, peculation and fraud. We have seen Credit Mobilier rings, whisky rings, mail-contract rings, Indian rings and what not. I have denounced these things no less earnestly than you. But I tell you, all these things will appear insignificant compared with the corruption and profligacy which must inevitably ensue when you put in operation a financial policy which, in order to "make and keep our irredeemable currency equal to the wants of trade," will oblige the Government to spend money in streams for the very purpose of getting it out; for then reckless extravagance with all the wastefulness and corruption inseparable from it will no longer appear as a mere incident, it will become the systematic practice of your Government, the very basis of your scheme of finance.
Democrats, do you ask for the confidence of the people on the ground that you are enemies of corruption and friends of economical, honest and pure government? If so, then make haste to mark with the stigma of your condemnation those of your leaders who attempt to inveigle you into the approbation of a financial policy which by the force of necessity will make the Government more corrupt and profligate than ever.
I ventured to affirm that while the Democratic party puts forth strict limitation of the powers of government and the suppression of corruption and extravagance as its first objects, those Democrats who advocate an inflation of our currency are advocating a more despotic and dangerous exercise of governmental powers, and a more demoralizing and oppressive extravagance and corruption, than we ever experienced, thus betraying the very principles which the Democracy most loudly professes. I trust no candid man will deny that I have made good my assertion. The interested partisan may quibble, but no patriotic man will close his eyes to the truth.
What excuse, then, can be presented for such a betrayal of professed principles? What advantages can so baneful a policy offer to compensate for such curses?
The excuses put forth shine by their flimsiness. Here is a very curious one from Governor Allen himself. In one of his first speeches he said substantially this: Not the Democrats, but the Republicans, forced the greenback currency upon the people. The Republicans are responsible for it. They, therefore, ought not to vilify their own child. And since they have forced the greenbacks upon us, they must not find fault with us, if we accept the situation and give them more than they bargained for.
Ah, Governor Allen, this will hardly do, not even in a pinch. You may not be satisfied with the past financial policy of the Republican party. Neither am I. But do you not call yourself a reformer? Do you not ask the people to vote for you on the ground that you are a reformer? Is it not the office of a true reformer to remove bad things and put better things in their place? And now you come and say, that your opponents have forced upon us a bad thing, and you propose to reform by giving us more of it! You are opposed to all dangerous assumptions of power by the Government, and now you propose to reform by giving us more of that! You are opposed to corruption and profligacy, and propose to reform by giving us more of that also! Indeed, a fine assortment of reformatory sweets in that inflation pill. No, Governor Allen, that will never do. If you propose to reform the evils you so loudly denounce by giving us more of them, you and your friends are not the sort of reformers sensible men will take to. If, indeed, that should turn out to be the real reformatory spirit of the Democracy, then prudent and patriotic men must feel in duty bound to turn round and look for salvation somewhere else. But, surely, even were I a lifelong Democrat, that kind of reformatory spirit I should, as a friend of the party as well as of my country, feel bound to aid in putting down to prevent it from doing fatal mischief to both. For this kind of reformatory spirit might at last reform Congress into an insane asylum, the public service, the machinery of the Government into the elements of a penitentiary and the party into a terror to all honest and civilized men.
But there is another excuse which at first sight appears more respectable. It is said the times are hard; business is languishing; our industries are depressed; thousands of laborers are without work; the poor are growing poorer; the country is full of distress; something must be done to afford relief. All this is true, and there are many well meaning men who, troubled by their difficulties, grope about for a remedy.
Yes, it is indeed necessary that something be done to afford relief. The question is what that something should be.
As wise men, we must first ascertain the nature of the disease before determining upon the method of cure.
The Democratic platform of Ohio affirms that the business depression was caused by the contraction of the currency wrought by the Republican party. Time and again it has been shown that this statement is false on its very face. But the inflationists, driven by the necessity of throwing dust in the eyes of the people, exhibit such an able-bodied perseverance in misstatement that I shall once more take the trouble to give the figures from an authentic statement before me.
From that statement it appears that in 1873, when the business crash occurred, there were in the aggregate more legal-tenders and bank-notes out than ever before; including the fractional currency, there were $9,000,000 more than in 1872, over $29,000,000 more than in 1871, over $52,000,000 more than in 1870, over $58,000,000 more than in 1869, over $56,000,000 more than in 1868, over $46,000,000 more than in 1867; and even if we count the compound interest notes into the volume of circulating currency we find that we had in 1873, the year of the crash, a general aggregate of $9,000,000 more than in 1872, over $29,000,000 more than in 1871, over $51,000,000 more than in 1870, over $56,000,000 more than in 1869, over $2,000,000 more than in 1868. And yet, just the years last mentioned have generally been called years of unexampled prosperity; and when during all those years the currency had reached its greatest volume, that collapse came, which the inflationists will have us believe was caused by contraction. There is the record. There was expansion, and no contraction; and if there was no contraction, then contraction cannot have caused the collapse in business. That is so simple a demonstration that I think Governor Allen should understand it. And yet I shall not be surprised to see to-morrow an inflationist come before you who, in the face of these facts and figures, will affirm that it was the contraction of the currency which did all the mischief.
What was, then, the cause of the crisis of 1873, the consequences of which are still upon us? I wonder why political economists of the inflation school will never remember that similar disturbances occurred in the business life of other countries; but two years ago a collapse of speculation in Austria and Germany, a succession of failures in England, and similar things in almost all European countries, France being a notable exception. And it so happens that in the countries thus afflicted, especially Germany, not only no contraction of the currency had taken place, but rather an increase of its volume, partly by the influx of coin through the war indemnities, partly by an increase of bank currency; while in France business appears prosperous, although not only heavy drafts were made on the national resources for the payment of the German war indemnity, but — and I invite you to mark this — a steady contraction of the paper currency has been going on all the time for the last three years, for the purpose of returning to specie payments, which had been suspended during the German war. And when you study the condition of things preceding the collapses in European countries and in ours, you will find that agencies of a kindred nature were at work there and here; no contraction of the currency whatever, rather an expansion of it; but industrial enterprise overleaping itself; an extensive production of things for which there was no immediate demand; the sinking of capital in great undertakings which could yield no immediate return; windy schemes, stock gambling, wild speculation in all possible directions and the creation of imaginary values; wasteful extravagance in private expenditures and high living extraordinary; a morbid desire to get rich without labor; an excessive straining of the credit system — until finally the bubble burst, and people found that they were by no means as rich as they had believed themselves. So it was there, and so it was here. France, on the other hand, had gone through a disastrous and destructive war; she had to pay heavy sums of money — 5,000,000,000 francs — as a war indemnity, and largely increased her debt. She was apparently prostrated. What was to be done? "Issue more paper currency to restore prosperity," our inflationists would have said. But no; a wise financial policy determined otherwise. Not believing that the country could recuperate by deceiving itself, they issued no more irredeemable paper money. They reduced the volume of that which was in circulation, they worked sturdily and steadily toward resumption, so that a franc not only pretends to be, but is a franc, and he that has one knows what he has. The people set to work again in a frugal and laborious way, their industries producing things for which there was demand in the market; no capital sunk in useless enterprises; no wild speculation; no self-deception by the creation of fictitious values — and thus you find France to-day, in spite of her disasters, economically in a more satisfactory condition than the countries around her. There is a striking lesson before us. No wise man will study it without profit.
Now, it being conclusively shown that the depression of business, was not brought on by a contraction of the currency, but by causes which always produce such results, the question recurs whether an inflation of the currency will furnish the relief we need. Our inflation doctors seem to me just as wise as a physician who would treat a case of overloaded stomach as a case of starvation.
Sometimes you will observe when a man is ill, and some medical tyro tries to cure in the wrong direction, that nature makes an effort to right itself. So it is also with the diseases of the body economic.
You say that, although the banks in the business centers are full of money, lying idle for want of employment, we want more currency. I tell you, business can have more currency; it can have as much as it likes without any further act of Government. According to law, every one of you, or any association you may form, having the necessary capital, can start a bank of issue. A general license to that effect, through the free-banking act, was given by Congress last winter. We heard so much of the West and the South wanting more local circulation and starving for greater banking facilities. Now you can make yourselves comfortable. All legal impediments are removed. You can issue any amount of currency. But behold! the currency will not inflate one cent's worth. And you, worthy patriots, who clamor for more currency, do not lift a finger to create more. Why not: Here is a reason given by the Cincinnati Enquirer: "There is not currency enough in circulation to buy the bonds to deposit with the National Government and obtain from it National currency in exchange." This is genius. It ranks with the most brilliant financial utterances of Governor Allen himself.
But I appeal to you, business men, laborers, farmers, who honestly desire to do right, and look up to your party leaders for instruction, if you want an instance of the impudent, insulting assurance with which these men depend upon your being too ignorant and stupid to tell obvious fact from obvious falsehood, look at this: Here is the great representative organ of the inflation Democracy, the tabernacle of its brains, the feeding-pipe of its wisdom; and now, while everybody knows that millions and millions of money are lying unemployed in the business centers of the country, East and West, looking for investment sufficiently safe; while everybody knows that in every large city in the land there are dozens of capitalists with abundant means which they might devote to the creation of bank-paper issues if it were profitable; while everybody knows that there is scarcely a town of respectable size without men of means fully able to form a combination for that purpose, that organ, fighting the truth as its personal enemy, coolly asks you to believe that there is not currency enough in the country to permit the purchase of bonds as a basis for further national-bank issues. When I read such things I do not know what to admire most: the audacity of the inventors or the pitiable weakness of the invention.
But the absurdity of that statement appears in its full glory when we look at all the circumstances of the case. Not only did the business of the country not show that it needed more, when it refused to issue more in spite of its opportunities, but it proved that it had more than it needed by surrendering a large portion of the bank currency in circulation. On the 1st of July of this year new currency had been issued to new and old banks, amounting to $7,780,000; but, according to a letter addressed to me by the Comptroller of the Currency, $23,579,134 of legal-tender notes have been deposited with the Treasurer for the purpose of retiring national-bank notes under the act of June 20, 1874, while under the redemption system created by the same act over $4,000,000 of national-bank notes have been retired — by far the largest part of this reduction taking place in the West and South, which, we are told, were starving for more circulation. By the 15th of September that figure had risen to nearly twenty-nine millions. How is this? The business of the country, as they tell us, suffering most terribly for want of currency, and that same business of the country not only not accommodating itself by issuing more when it has an opportunity, but voluntarily surrendering many millions of what it has.
Let the Enquirer explain. Perhaps that exponent of inflation wisdom will say now that we have not currency enough, to keep us from giving up that which we have got.
But there are the facts. There is contraction; not contraction by the Government, not contraction by the Republican party, not contraction forced upon the business of the country, but a contraction of the currency voluntarily set on foot by the business of the country when that business was at perfect liberty to choose expansion as well. To carry out the somewhat homely figure, the diseased body economic refuses to take the medicine administered by quacks; nature makes an effort to right itself; the overcharged stomach begins to give up its undigested food, and disgorges currency for which there is no legitimate employment. That state of things would seem well calculated to convince any candid man of the true state of things. But the inflation doctors, nothing daunted, still, in spite of all this, insist upon treating the case as one of starvation, and propose, if the patient refuses to take it willingly, to ram down by force still more of the indigestible stuff. They evidently belong to that class of doctors to whom the sale of the medicine is more important than the cure of the patient.
And what good do you promise us your inflation medicine will do? A patent-elixir advertisement could not be richer than the declamations of its advocates. Prosperity is to revive at once; every man, woman and child is to have plenty of money; all debts are to be paid by a sort of self-acting process; every mine, every factory, every mill in the land is to be at once in full blast, and thousands of new establishments will spring up on all sides; they will produce an infinite quantity of goods, and for all they can produce there will be a ready market; everybody will want to buy everything, and have plenty of money to do it; the laboring man will command the situation; he will have to work less and get higher wages for it than ever; and in an incredibly short time we shall all be rich; or rather, while now the rich get richer and the poor get poorer, then the rich will get poor and the poor get rich, the "money power" will be broken, for money will be cheap money, it will be "the people's money," and the more of it the better. This sort of talk, and even wilder than this, you can hear nowadays, not only in the lunatic asylums, but on the public platforms of Ohio, put forth by men pretending to be the spokesmen and leaders of a great party, who, on the strength of these very promises, attempt to take control of the destinies not only of Ohio, but of the great American Republic.
Is it not a sad spectacle indeed to see, not only public men reckless enough thus cruelly to mock the credulity of the poor and needy, but multitudes patiently listening to such raving absurdities, instead of repelling the insult thus wantonly offered to their good sense? An irredeemable paper money, cheap money, the people's money! Inflation the relief of the poor! I entreat you, laboring men, poor men, give me your candid attention one moment. Let your minds for once cast aside prejudice and party passion, and look soberly at the facts.
Suppose we issue more currency, as the Ohio platform euphoniously calls it, "to make and keep the volume of the currency equal to the wants of trade"; in other words we embark in a course of inflation. I will not argue here the Constitutional point, whether Congress has the power to increase the volume of greenbacks beyond four hundred millions, and whether the Supreme Court, as I expect it would, might declare such an act void and of no force. Suppose it can be done without any legal impediment. How will it operate? Here is a capitalist, a rich man, a merchant of abundant means, or a wealthy speculator. In the morning he takes up his paper and reads: "Congress has passed an act to issue another hundred or two hundred millions of legal-tenders, with a prospect of more." He knows, as a matter of course, that thereupon the premium on gold will rise; the purchasing power of the greenback dollar will decrease. The next piece of news he gets in or from Wall Street is: Gold is going up and likely to rise steadily. What does he do? He begins at once to trim his sail to the wind. He seeks a way to take advantage of the fluctuations going on or still in prospect, and being a man of means, commanding hundreds of thousands or even millions, he easily finds that way. If he is a cautious man, he has, of course, lent out money or given credit only on short time, and he at once calls in the money due him with rigorous severity, to save himself from the effects of depreciation. The debtor may groan, but he will have to pay or go into bankruptcy, for the rich man saves himself before the storm, and puts his money into investments not apt to be unfavorably affected by the fluctuations of the currency. If he be a merchant, he will at once put up his prices to provide against the depreciation of the currency, and sell only at large profits and for cash, for he is not anxious to sell, and being a wealthy man, not obliged to sell, knowing as he does that his goods will rise in current money value on his hands, while his credits would depreciate. So, by taking advantage of the fluctuations going on, which, as a man of means, he is able to do, he not only saves himself but makes a handsome profit by shrewd calculation. Or, if he be a speculator, and a somewhat venturesome man, he will speculate on the rise in the price of stocks or goods, in the true gambling style, and perhaps contrive to run into large liabilities, expecting to pay them off in a money of less value than that in which he contracted them. Happily, the latter species of operators will sometimes be caught, but not unfrequently they succeed. And so on through the whole chapter. Thus the rich man, having the means to play fast and loose, standing upon that eminence in the business world where he can feel the drift of every breeze and watch the appearance of every cloud on the horizon, enjoys the fullest opportunity and all the facilities which wealth furnishes, amidst the fluctuations of the currency and of prices, to lend out or to draw in money, to give up one investment and to make another, to buy or to sell, to speculate upon a rise or a fall — in one word, to take advantage of every chance, not only for his safety, but for his profit, as his good judgment may suggest; and in the end he will, if he was a shrewd calculator, have grown richer than ever before, by those very fluctuations. And if you had your eyes open, you could not fail to observe that the time when an irredeemable currency, with its ever fluctuating changes of values, prevailed in this country was just the time when the rich men grew rapidly richer, and enormous accumulations of wealth fell into single hands.
But now look at the other side of the picture. Here is a laboring man who works for wages. He is honestly toiling to support himself and his family, and may be has succeeded in saving a few hundred dollars, and deposited them in a savings-bank. Now Congress resolves to issue more money in abundance, and inflation commences in good earnest. The laboring man, who has listened to Governor Allen or General Gary, thinks the millennium is coming. The "people's money" will be plenty. The gold premium rises, and the prices of commodities also. The worthy laborer does not, like the rich man, read the financial articles and the market reports in the metropolitan journals, and if he did it would be of no benefit to him. The rise of the gold premium troubles his mind very little, for the "people's money" is to be cheap and plenty. But some day he goes to the store, to buy things for his household and his family. To his surprise he finds that the prices of groceries and shoes and clothing and so on, have become much higher than before. "How is this?" he asks. "Well," says the dealer, "gold has gone up, I have to pay much more for the goods I buy of the whole sale merchant. Therefore I am obliged to charge more." So the worthy laborer has to pay those higher prices, for he cannot wait for a better chance, like the rich man; he must buy shoes and clothes, or he himself and his wife and children will have to go barefooted or naked; he must buy provisions, for his family must eat. He consoles himself with the idea that the "people's money" will make it all right. After a while he discovers that with the high prices he has to pay for all his necessaries, his wages are no longer sufficient to support him and his. So he goes to his employer and says: "Everything has become very dear, and I can no longer live on the wages you give me. You must give me more." What is the answer? "Well," says the employer, "things have gone up because gold has gone up so much. Wait a little, it will come all right again. The currency will fluctuate, and, you see, in my large business I cannot change my scale of wages every time gold goes up or down." He omits, however, to add that he has been very quick in marking up the prices of all he had to sell as soon as the upward movement commenced. The laborer shakes his head, but submits for the time being, hoping for a favorable change. But things do not come all right again. Prices rise still higher, while his wages remain the same. At last he finds his situation unendurable, and, combining with his fellow-laborers, he loudly demands higher pay. The employer yields, or rather seems to yield. Gold and prices have gone up thirty or forty per cent., and he grudgingly consents to increase wages about fifteen or twenty per cent. That is all he can do, he says, for "things are so uncertain." In the meantime, more "people's money," more greenbacks, are issued, to "make and keep the volume of the currency equal to the wants of trade," gold and the prices of commodities rise still higher, while wages creep slowly after them at a respectful distance. Meantime, the lease of the dwelling of our worthy laborer has expired, and he wants to renew it. The landlord demands a much higher rent. "Higher rent!" exclaims the laborer; "am I not fleeced enough already?" "Cannot help it," says the landlord; "gold and general prices have gone up so much, and our money is worth so little, that I must have higher rent to get along myself. You must pay or move." The laborer has to submit, but resolves to emancipate himself with "the people's money" from the greedy tyranny of the bloated landlord. He has something like two or three hundred dollars of old savings, in the savings-bank, and makes up his mind to build a home for himself and his family, the simplest kind of a little wooden house of two or three rooms and a kitchen, on a cheap little lot in the outskirts. Formerly his reserve of money would have gone far toward accomplishing that end, but, upon inquiry as to the present prices of ground and building material, he finds that, since "the people's money" has been issued in abundance, his own money will not go half as far as formerly toward giving him a home. In other words, about half of the purchasing power of the real value of his savings has disappeared. But, determined to escape from the tyranny of the landlord, he resolves to try whether he cannot, in addition to his own, borrow money enough to accomplish his purpose, for, of course, "the people's money" must be easy to obtain at low interest, being "the people's money." He applies to a money-lender for a couple of hundred at low interest, on two or three years time, to be secured by mortgage on the house and lot. "Low interest and three years time!" exclaims the money lender. "My dear man, you do not understand the period. Since more and more greenbacks are issued the value of the dollar decreases rapidly, and if I lend you money now on three years time, how do I know what that money may be worth at the end of the three years? Perhaps ten cents in gold or nothing, and you cannot pay me interest enough to cover that risk."
The worthy laborer is surprised. He thought "the people's money would be cheap money." "But," he asks, "is no money lent out at all?" "Certainly," says the money-lender; "it is lent out, if good security is offered, on call, so that I can at any moment of fluctuation dangerous to my interests put my hand upon it and take it back again." "Then," pursues the laborer, "you would be able to seize at any moment upon the security I give if I cannot pay at once when you happen to want your money back? That will never do for me." "Just so," says the money-lender; "such loans can be used only by rich men, who can make sufficient means available at any time. Of course, it's nothing for the poor." The laborer grows more and more thoughtful. "But," he asks at last, despondingly, "is there no way at all to help me and to secure you in this thing?" "Well," replies the money-lender, "there may perhaps be one way. Suppose we figure out what the amount of money you want would be in gold, and I lend it to you in gold and you secure to me by a mortgage on your property the repayment of that sum in gold at the end of three years. That would do for me, and you might have the money at reason able interest." The laborer ponders. "But," says he, at last, "how do I know how many greenback dollars I shall have to pay for a gold dollar at the end of three years? Perhaps five or ten to one." "That's true again," says the money-lender, coolly, and there the negotiation ends. The worthy laborer begins strongly to suspect that there must be something wrong about "the people's money," which is to be so cheap for the poor man.
But there are more curious experiences in store for him. The policy of "making and keeping the volume of the currency equal to the wants of trade" requires the issue of larger and larger quantities of "the people's money," for the wants of trade, instead of being satisfied, demand more with every new issue. The prices of the necessaries of life rise higher and higher as the value of the paper money goes down and down. The speculators and gamblers of the country do a roaring business. Prosperity develops to such a point that a bushel of coal costs twenty dollars, and a jackknife its weight in greenbacks. The worthy laborer's deposit in the savings-bank, once sufficient to build a little house, will no longer buy a decent pair of boots, and as the rise of the prices of necessaries always runs far ahead of the rise of his wages, he has been rather consuming what he had than laying up new savings.
Finally the inevitable crash approaches. The prudent rich man has anticipated its coming and taken his precautions. He can do so, for he had the knowledge and the means. But the poor man is the victim of his necessities. To take precautions is not possible for him. He is swept along by the tide. A feeling of distrust creeps over the business community. One day our worthy laborer goes to his place of work as usual. "I am sorry," says the employer who sniffs the breeze, — "there is an overstocked market and a downward tendency; I am obliged to take in sail. I have but little work for you at low wages, or no work at all." At last the shipwreck is complete. The rich man is in the lifeboat, the poor man in the breakers. And nothing to float him.
About that time I hope Governor Allen and General Gary will come along and repeat their speeches about "the people's money." What will then the poor laborer say in response? "Talk to me about your people's money! It is the gambler's money, the bloodsucker's money, the sharper's money, the devil's money!" And it may then perhaps be wise for Governor Allen and General Gary and the other apostles of "the people's money" to stay away from the streets where their robbed and outraged victims congregate. I apprehend the vengeance of the poor, which Mr. Kelley, of Pennsylvania, in this campaign so loudly threatened against the advocates of resumption, might turn the other way.
Have I exaggerated? Who that has ever studied the history of countries where an irredeemable paper currency prevailed, will deny that every word I have said is borne out by the universal experience of mankind? Who will deny that, when the depreciation of such a currency drives up prices, the laboring man's wages rise last and least? Who will deny that, when the bubbles of paper speculation burst, the laboring man's earnings are cut down first and lowest? Is our country an exception to the rule? The statistics compiled by the Labor Bureau of Massachusetts, corresponding with those of the United States census, show that the cost of living had risen sixty-one per cent. between 1860 and 1870-72, while the average increase in wages was but thirty. The greater the inflation, the greater the distance between prices and wages. And who does not know, when the crisis in 1873 came, that work stopped and wages went down a good while before the cost of living did? And who had to lose the difference? The laboring man. What follows? Of all agencies which human ingenuity can invent, there is none that so insidiously robs human labor of its earnings and makes the fortunes of the poor man the football of the rich, as a currency of fluctuating value. To call it the people's money is as cruel a mockery as to call loaded dice the honest man's chance against a sharper. It is the most insidious agency to make the rich richer and the poor poorer.
We are told that an expansion of the currency and its consequent depreciation will benefit the poor, inasmuch as it will benefit the debtor as against the creditor by enabling the former to pay off his debts in a less value than that in which they were contracted. The morality of that argument I will not discuss; I prefer to leave it to the conscience of the people. But let us look at the pretended facts upon which it is based.
Is it true, then, the poor men are the debtors of the country? To contract a debt requires credit, and credit is based upon means with which to pay. Men of very small means are seldom in debt, because they have no opportunity for being so. If we had the statistics of private indebtedness in the United States before us they would unquestionably show that more than seventy-five per cent. of it is owing by men commanding comparatively large means, and that the laborers for wages are the least indebted class of society, even in proportion to their earnings and savings, and next to them the farmers and the small business men. But the laboring people are, to a very heavy amount, among the creditors of the country. I venture to say that there is neither a manufacturer, nor a merchant, nor a professional man of means in this assembly who is not a debtor, and among his creditors are, in ninety-nine cases of a hundred, his workmen or his servants, to whom he owes wages for part of a week or a month. It has been calculated by good authority that the wages thus constantly owing for an average of half a month's service or work amount, in the whole country, to $120,000,000. And who is it that owns the deposits in the savings-banks, amounting to about $760,000,000? Not the rich, but the laboring people and persons of small means, who put their surplus earnings there for safe keeping. It is estimated that the same class has, in national and private banks and in trust companies, another $200,000,000 and that nearly $130,000,000 is owing them in other kinds of debts. There is, then, a sum of about $1,200,000,000 owing to the laboring people and men of small means, constituting their savings. To that amount that class are creditors. And you pretend that for their benefit you will expand the currency. Gold being at fifteen per cent, premium, those savings have a value of $1,020,000,000 in gold. Expand the currency until the gold premium is thirty, and you have robbed those people of $180,000,000 of their savings; expand it until the gold premium is fifty, and you have stripped them of $420,000,000 of hard-earned money. There are the pensioners of the United States, the disabled soldiers of the war, and the widows and orphans of those who died for all of us. They receive thirty millions a year, at present representing a gold value of $25,500,000. Expand the currency until the gold premium is thirty, and you have filched away $4,500,000 a year from what the Republic considers a debt of honor, and robbed the wounded and the widows and orphans of so much of their sustenance. Precious friends of the people those are who, under pretense of protecting the debtor against the creditor, rob the laborers of hundreds of millions of their hard-earned savings and despoil even those who have suffered for their country.
But is not a large portion of the middle class, small business men and farmers, in debt, and would they not be relieved by an expansion and depreciation of the currency? No doubt there are many of that class burdened with liabilities, although the number of mortgaged farms is much smaller than generally supposed. I find that here in Ohio scarcely one farm out of ten has any incumbrance. But however that may be, would that expansion of the currency benefit those debtors? I say, No! for a very simple reason. No sooner will expansion become the declared policy of the Government than capitalists, money lenders and business men having money due them will be upon their guard. Knowing that the expansion of the currency will subject their out standings to progressive depreciation they will at once seek to anticipate that event. They will use every means in their power to get hold of their money, or, without mercy, clutch the property that secures it, and foreclosures, executions, sheriff's sales will be the order of the day. The creditor, to save himself, will appear in his most relentless temper, and in thousands of cases the debtor, thus getting rid of his indebtedness, together with his property, in the manner most disastrous to him, will have reason to curse those who pretended to relieve him by "making and keeping the volume of the currency equal to the wants of trade."
But I am sure that it is not from that class of honest debtors that the cry for inflation comes. It is another set of men of different character. I know them, for I have seen them haunting the lobbies of Congress and the avenues of the Capital when the financial question was under discussion and I am sure you have seen them here among the most clamorous advocates of inflation. I do not point to the political demagogue alone, who seeks to make some capital for himself by joining what he believes a popular cry. But I mean the disappointed speculators, who, instead of following the path of frugal and steady industry, tried quickly to get rich on their wits, by getting up large financial operations on a small capital of their own or on borrowed money, and who finding themselves baffled by an unfavorable turn of things, and involved in heavy liabilities, now want "the people's money" to help them out of the lurch and to pay their bills. Here it is a speculation in city lots; there a paper town at a river mouth or a railroad junction; then again a large operation in coal lands, or silver mines, or fancy stock or what not. What they desire, is by a large expansion of the currency, to plunge the country once more into the fever of wild speculation, so that they may have an opportunity to palm off their elephants upon other people, and then, when they themselves have secured their prize, let "the devil take the hindmost." And men of this class are the most vociferous apostles of "the people's money."
Suppose they succeed in their scheme; suppose by inflation, the speculating fever be revived, and they not only get rid of their liabilities, but make millions of profit on their gambling enterprises, who will lose the millions they gain? Who will pay the cost? Not the victims alone who are foolish enough to take the speculating enterprises off their hands, and then are caught by the final crash inevitably to come. Such victims would, perhaps, deserve their fate. No, the cost would be paid by the laboring men of the country, whom the depreciation of the currency would plunder of the difference between the rise of the prices of necessaries and the rise of wages. The cost would be paid by the industrious and frugal, whose deposited savings would be robbed of their value; by the pensioners, the disabled soldiers, the widows and orphans of the slain, whose slender incomes would be despoiled of their power to buy bread; by every honest man in the land, who would suffer in the game of overreaching which the inflated currency would bring with it. It is the "people's money" they call it.
But I tell the speculators they will not succeed in their scheme. They are making a very serious mistake in their calculation. They believe if we now inflate the currency things will go on as swimmingly as they did when, during the war, the legal-tenders were first issued and gradually augmented. They will soon perceive a very essential difference. When the legal-tenders were first issued our people had to gain their first experiences with an irredeemable Government currency since the Revolutionary War.
The greenback appeared, not as a trick of scheming financiers, but as the creature of public necessity. The people had full confidence in the integrity and good faith of the Government as to the fulfilment of its promises. When the events of the war went disastrously against us, doubts arose as to the ability of the Government to redeem its pledges, but not as to the honesty of its intentions. Those doubts affected the value of the paper money. But when the chances of war turned in our favor and at last the arms of the Union triumphed, there was scarcely a man in the land who did not believe that what the Government had promised would, as a sacred obligation, be faithfully performed. And the same confidence which the legal-tender commanded at home was commanded by our bonds abroad.
But if you inflate the currency under present circumstances, what will be the condition of things then? The additional greenback will not appear as the creature of an imperative public necessity, to save the life of the Republic in the extremity of peril. It will appear as the product of a scheme the purposes of which are dark. The world will begin to suspect that when a government, in the face of the disastrous experiences of mankind, resorts to so extraordinary and dangerous a measure without necessity, its integrity cannot longer be depended upon. Doubts will arise, and very serious doubts, not as to the ability, but as to the honest intentions of the Government to redeem its promises. And those doubts will fall upon our business life like a deadening blight. The last remnant of confidence will be paralyzed. The world will see the specter of repudiation looming up behind so reckless a financial policy. The faith of mankind in the integrity of our Government giving way, our credit will be shaken to its very foundations, and, as you sometimes see the depositors of a bank, excited by the rumor that the cashier is making away with the cash, instinctively unite in a feverish run upon the counter, so you must not be surprised if, in the general alarm about threatening dishonesty, you see the securities, not only of the Government, but of our private corporations also, flung by the hundreds of millions into the market, producing a crash more fearful and destructive, and a paralysis more deadly to all our economic interests than any people on earth can remember for generations past.
That, fellow-citizens, is the feast to which the advocates of inflation invite you so blandly. That is the revival of business, that is the wonderful development of prosperity which they promise you in such glowing colors. That is the drift of the policy which is to set our factories whirling, to make our farmers rich, to give our laborers abundance of work and unprecedented wages, to put bread into the mouths of the needy. Open your eyes to the truth, and you find nothing but a prospect of bankruptcy more general, and paralysis more fatal, than ever before — although it may be a small consolation to the honest men of the country to see the reckless speculators, who, at the expense of all, sought to enrich themselves, engulfed with them in the same ruin.
But I ask you, with all candor and soberness, business men, farmers, laborers, honest and patriotic citizens of all classes, is it not time to stop such wanton schemes of mischief? Can we be so blind as not to see its tendency, or, seeing it, so reckless as to run so terrible a risk? I know as well as anybody that business is depressed and that many are grievously suffering. But does not the common-sense of mankind, does not the accumulated experience of history, does not our own recollection of past events clearly point out the road of improvement and relief?
There being an abundance of money in the banks that lies unemployed, it is evidently not more money we need. What do we need, then? Confidence, confidence which will induce timid capital to venture into enterprise. And what is the first requirement to restore confidence? It is stability, above all things the stability of current values, which renders possible business calculations of reasonable certainty. When the capitalist is assured that the dollar of to-morrow will be the same as the dollar of to-day, and that this stability of value finds full security in a rational and fixed monetary system, then, and no sooner, will he liberally trust his money to those who want actively to employ it and promise a fair return. But confidence will not grow as long as the prospect that the wild schemes of demagogues or visionaries may obtain control of our National finances hangs over the business world like a threatening storm-cloud. Confidence will not grow as long as every business man in the country looks with trepidation for the meeting of the National Congress, and does not cease to tremble until the welcome day of its adjournment, for fear lest the counsels of folly might prevail and cross even the most sensible calculation and baffle the acutest foresight. Confidence will not return until a financial policy is unalterably determined upon, which will give us, not more money, but HONEST, SAFE money. For honest, safe money is, of all foundations of sound business, the most indispensable.
Let us understand the teachings of our own history. There are many among us who remember the great crises of 1837 and 1857 in the United States. In both cases the country was flooded with an ill-secured, unsafe bank currency, and feverish speculation prevailed. Then the crash came. Speculation collapsed, the bubble of fictitious values burst, the rotten banks broke, and their currency was swept away. Business was paralyzed; the people were in distress as they are now. What remedy was applied? The natural, the only efficient remedy, and it applied itself. No fresh infusion of more unsafe money; no, just the reverse. By the breaking of the rotten banks and the disappearance of their note issues the volume of the currency contracted itself violently. There was, at the end of the process, far less money in circulation than before, but that which remained was sound money. People came to their senses. Profiting by the teachings of misfortune, they began to recognize once more that not wild speculation, not the creation of imaginary values, but honest, sturdy, frugal industry is the source of real wealth and prosperity. When the first effects of the great shock were over, when the lies and deceptions in the shape of rotten bank issues and fancy values had disappeared, when the self-acting contraction of currency and credit had done its work, business enterprise began once more to feel firm ground under its feet. Business men had less of that which called itself money, but they were sure that every dollar they did have not only called itself a dollar, but was a dollar and would remain a dollar. Upon the stability of its value they could unhesitatingly base their calculations. Thus confidence gradually returned; the gaps in the volume of the currency were presently filled, not by act of Congress creating paper issues, but by gold flowing in from abroad in obedience to the laws of trade, and notes based upon gold; business enterprise revived, and soon the country was again in the course of prosperous development. To be sure, the fancy stocks and speculative values, which had perished in the crash, did not recover, but the production of real wealth was more active than before.
Look at these historic events, and then ask yourselves: What would have been the effect if Congress had tried to relieve distress and to revive business by making the notes of the broken banks a legal-tender, or by creating an irredeemable Government paper currency? A new element of fluctuation and uncertainty would have been thrown into the general confusion; the stock gamblers and speculators might perhaps have succeeded in loading their rotten ventures upon the shoulders of new victims; but the stagnation of legitimate business would unquestionably have continued, capital would surely not have ventured out, confidence would not have returned, the general distress would certainly have lingered on, until at last that element of unsafety and deception — an irredeemable and fluctuating currency — had been wiped out, and the business of the country had been placed again on the sound basis of the stability of current values.
Can we fail to understand that lesson? Examine the crisis which broke out two years ago, in September, 1873. That crash did not contract our currency; on the contrary, what there was remained, and shortly after the volume of greenbacks was increased twenty-five millions by successive issues from the so-called reserve. Money did not disappear, as it did in 1837 and 1857. There was more of it than before, and yet the general stagnation and suffering continue, and the future appears to us dark and gloomy, without any sign of improvement. Yes, we have more money than before; but who of you can tell me what that money will be worth twenty days after the opening of the next session of Congress? Who of you can tell me what wild antics that money may play with the fortunes of all of us, if those who clamor for inflation now should obtain control of the National Government a year hence? And now, feeling as we do with every step, instead of firm ground, a treacherous quicksand under our feet, is there still anybody who asks why confidence does not revive, why capital timidly shrinks back, why the mass of money idly accumulated in the banks does not trust itself into the hands of enterprise, why prosperity does not return, and why the horizon is still without a visible ray of hope?
My fellow-citizens, all sane men agree that, of the great problem which oppresses us, there is but one ultimate solution. It is the return to a specie basis. Whatever other schemes may be devised, they do not even pretend to have a permanent, final settlement of the question in view. The resumption of specie payments is the only rational one, for no other system will remove current values from the reach of the arbitrary power of Government; no other can give to current values that stability without which no safe business calculations can be made; no other can restore that confidence which is the first prerequisite of a new period of prosperity. But the resumption of specie payments is also the only possible solution. It must at last come. Even the inflationists, while wildly seeking to throw difficulties in its way, still admit that finally it must come. It is as inevitable as fate. Is it not the part of prudent men, then, to move resolutely and with unflagging firmness in the direction of an end so desirable and also so inevitable?
I shall certainly not attempt to deceive you by denying that when a country is once cursed with an irredeemable paper money, the resumption of specie payments is not an easy process. Like the cutting out of a cancer, it is an unpleasant and difficult operation. But if health is to be restored, the cancer must be cut out. It is one of those evils which cannot be cured without pain and cannot be permitted to linger without peril. Delay will only prolong the suffering and increase the danger.
This is neither the time nor the place for a discussion of the different methods to bring on resumption. What we have at present to do is to stem a mischievous movement which threatens to make it impossible. But any of those methods, even the most painful, will be far less so than a continuance of the present diseased condition of uncertainty and distrust, which wastes the working energies of the people in desolate stagnation, and, like a dry rot, eats up our prosperity. And surely, even the severest cramp to which resumption might subject the economic body will be nothing compared with the universal disaster, ruin and disgrace with which the madness of inflation would inevitably overwhelm us.
Indeed, is there any choice? We shall inevitably have a resumption of specie payment sometime; if not by a careful method, embodied in well considered legislation, then surely in another way. Then we shall drift on until our present system bears its legitimate fruit; until by a destructive convulsion our paper money is swept out of existence, and, suddenly finding ourselves without any currency, except what little specie there is left in the country, we commence business again on a very small scale. But will you not then, sitting upon the wrecks of your fortunes, wistfully look back to these days and say: "Then we should have been resolute enough to do what was necessary, and all would be better now"?
I appeal once more to the farmers, the small traders, the laboring men of the land: Will you really permit the world to think you so weak-minded as to believe that the increase of paper money would be equivalent to a Government officer going round the country with a large bag full of greenbacks to put some into the hands of every one who wants them? Or that, when you have a mortgage which troubles you, or a note to pay, or desire a loan, the Government will step in and hand you the funds? Or that the Government will, by issuing more paper money, constitute itself a sort of a rich uncle, whose business and pleasure it is to keep the pockets of the boys full of cash? Surely you are too sensible to believe in so glaring an absurdity. And yet, such are the impressions those seek to create who, as advocates of inflation, call themselves the special champions of the laboring man and the poor.
The least reflection will certainly convince you that, whatever our financial policy may be, whether there be much or little money, he who wants to get it must earn it. The capitalist will gain it by profitable investments, the trader by buying and selling, the farmer by raising crops, the laborer by the work of his hand. Nobody will get it for nothing. But, if, under all circumstances, you must gain it by hard work, must you not see that it is manifestly for your interest to have money the value of which is certain? Must it not be clear to you that, while the capitalist may operate with money of changing value to his advantage, you with money whose purchasing power may dwindle in your hands to less and less and, maybe, finally to nothing must always be the losers in the game? Are there not many among you who remember that in the times of wild-cat banks, in working for such money, they worked not unfrequently for nothing? And does it not occur to you that if the inflation scheme prevails, the same thing may, nay, surely will, happen to you also? For do not indulge in any delusion about it, the gambling in which an irredeemable currency, a paper money of ever-changing value, is the principal element, is not a game for the laboring man, the poor man, to play. In that game only those win who deal.
An attempt is made to deceive you with a well sounding catchword. They call gold the bondholders money, and our irredeemable paper money "the people's money." Can that be "the people's money" whose value in the people's hands is apt to vanish into nothing, and is sure to vanish into nothing if much more of it is issued? I, too, am in favor of a people's money, but it is of another kind. No, it is not right that the people should have a money of less value than the bondholder. It should be equalized. But how? You cannot take from the bondholder his gold, unless you repudiate our National obligations, which, as honest and patriotic Americans, who have the honor of the country at heart, you will not do. Neither can you bring the bondholder's gold down to the level of your paper money as long as that paper money remains what it now is, or is made even worse. But what you can do is to lift your paper money up to the level of the bond holder's gold, so that you can get gold in exchange for it. That can be done only by a return to specie payments. Then it will indeed be the people's money, and the bond holders will have no better. It will be true people's money, for then your dollar will be and remain a real dollar, no longer a lying piece of paper, whose value depends upon the tricks of demagogues, and about which you have to inquire every morning what it is worth.
But I would go farther to make the people's money secure. If, after the restoration of specie payments, my opinion could be made to prevail, no bank in the United States, nor the Government itself, should be permitted to issue a note of a denomination less than five dollars. "What!" I hear the inflationists exclaim, "you would take the convenience of small notes from the people?" Yes, I would let them have something better. They should handle gold and silver. It is the small currency that most circulates among the people of small means, and it is of vital importance to them that that small currency be most secure in its value. It is a wise policy in pursuance of which the Bank of England does not issue a note under five pounds. The effect is not only that more gold and silver circulate and remain in the country, but even the great Bank of England may break, and yet every shilling in the pockets of the people is safe. That is the true "people's money," which I want the laboring men of America to have.
Does not your good sense tell you that thus your interests would be infinitely better secured, than by a currency which, by its treacherous fluctuations, makes you the helpless victim of chance?
But are you ever to have that true people's money again? Yes, if by a wise policy we resolutely work toward specie resumption. Then in a few years. But surely not for a long while, if the schemes of the inflationists prevail. In that case you will get it only when, after years of struggle and suffering, by an excessive increase of the currency — in a universal crash — the whole system will have broken down, when every paper dollar will have become worthless, when all you now possess will have been swept away, and when you are then called upon to begin again with nothing, and earn once more your first dollar. Do you like that prospect?
Indeed, while I can understand how the gambling speculator, who finds it profitable to fish in troubled waters and who makes his gains from other people's losses, should be in favor of inflation, it is utterly amazing to me how the working man, all of whose material interests are bound up in honest money, could ever be prevailed upon to listen a single moment to the treacherous doctrines that would deliver him bound hand and foot into the meshes of a system which in its very nature is robbery itself. Let me tell the laboring men that they have no more heartless enemies than those pretended friends, who, with artful catchwords playing upon their credulity, seek to make them believe that they possess the secret of alchemy with which to create wealth out of nothing, and with that nothing to make those happy who serve their purposes. If their schemes, unfortunately, should prevail, then the time will surely come for their poor victims to curse the day when they foolishly followed such treacherous counsel and curse the men who administered it.
A word, now, to those Democrats who, in their hearts, still adhere to their old, good creed, and would spurn the false doctrines of their present leaders did they not consider themselves by supposed party interest bound to submit. I do not speak to you as a partisan, for I am none. I am in earnest when I say that all I desire for this country and myself is Constitutional, honest, just and wise government, and little does it matter to me at the hands of what party the country receives it, provided it be in truth Constitutional, honest, just and wise. Neither do I conceal from you my opinion that the old parties, as now constituted, are ill-fitted to solve that problem, and that an active union of the best elements of the two would better serve the purpose. But if the two old parties are to continue to divide the field, then, for the sake of the public interest, I want each of them to be as good, and not as bad as possible; for it is certain that in the derelictions and vices of one the bad elements in the other will find a license for wrongdoing on their part, without forfeiting their chance of success. I might appeal to you as patriots to whom the best interests of the Republic should stand above all other considerations. But since you seem to believe that the interests of the Republic are to be served by your party alone, I speak to you as partisans who desire to promote the efficiency of their organization for good ends.
Have you considered what consequences the success of the inflation Democracy of Ohio will bring on? Imagine that its candidates be elected and its policy be indorsed by the people of this State; imagine the movement spreading and imposing its doctrines upon the Democratic National Convention next year. What then? All of you, hard-money Democrats, will be remorselessly sent to the rear; your influence will be utterly crushed out, for the men who will then rule your party want none of you. Why do I say this? Not to appeal to a selfish impulse, but because it is true, and I sincerely regret it, for I deem it most desirable for the public good that each party be guided by its best men.
But more than that. Suppose the inflation Democracy, having taken possession of the national organization of your party, do succeed in their rush for the National power, and, having one of their own in the Presidential chair, and a majority in Congress, proceed to carry out their program. What then? Then unlimited inflation, and, as an inevitable consequence, universal bankruptcy and ruin more destructive than ever. And then? Remember, the attitude of your party on the slavery issue, and questions connected with the civil war, has cost you sixteen years exile from power. Let your party become responsible now for the disasters which inflation will bring with it, and it will be looked upon as the common enemy, and any organization that in four years may rise up against it will be able to wipe it out of existence, however rotten in morals that organization may be itself. What is, then, the true dictate of your party allegiance in its nobler sense? To preserve in your party the power of doing good service by defeating those who seek to make it only an engine of mischief and of suicide. And how are you to defeat them? I remember the time when I received high compliments at your hands for having shown independent spirit enough to oppose my own party by voting against it when I considered it in the wrong. This is a great emergency, in which a signal service is to be done for the best interests of the country; and you, hard-money Democrats of Ohio, can find no better opportunity to enable me to return your compliments for the patriotic spirit of independent action.
Indeed, it is a great emergency. I solemnly appeal to every good citizen of this State to be mindful of his responsibility. Upon your action on the 12th of October hangs a great decision. If the people of Ohio strike down the inflation movement in their midst, that will be its final overthrow. It may linger on, but the power of its onset will be broken. If Ohio fail and the advocates of barbarism and ruin rush victoriously into the field of next year's greater contest, then who knows? Future generations may have to look back upon the one hundredth anniversary of American independence — the year which, before all others, should fill the National heart with the noblest aspirations — as one of the blackest years in the history of the Republic. To meet the danger here is, therefore, the first thing needful. Upon the honest men of all parties I call to unite in a common effort. Let no one fear that the defeat of an opposition party which uses the advantages of its position to promote such nefarious schemes will be interpreted as an approval of wrongs on the other side, for, I assure you, when this great danger which threatens to engulf us all in a whirlpool of corruption, ruin and dishonor is successfully averted, you will find the men who combated the wrongs of either side as true as ever to their principles.
Citizens of Ohio, you are charged with a great office. You have to give the world the assurance that the people of the great American Republic are an honest and an enlightened people; that their integrity and intelligence may be trusted alike, and that mankind may count upon them in the forward march of civilization. I entreat you, do not fail in so glorious a duty.