Democratic Sentinel, Volume 2, Number 32, Rensselaer, Jasper County, 20 September 1878 — THE CURRENCY QUESTION. [ARTICLE]

THE CURRENCY QUESTION.

Open Letter from Peter Cooper to John Sherman. My Dkxb Sir:—Since I had the honor of your call at my house, and since the letter I sent you and the receipt of your reply, I have reflected seriously on the few minutes’ conversation I had with you on that occasion, and on the acts ot government since that time. I hope you wiU recollect how earnesUy I endeavored to show you that tbe constitution has made it the first and most important duty of congress to take and hold the entire control of all that should ever have been allowed to circulate as the money, the weights and the measures of the nation. In all that I have written I have labored to make plain the fact that the establishment of justice, with the making of the necessary and proper laws w&rs the most important duties enjoined on congress by the constitution of the United States. I believe I have shown that nearly all the financial laws that have been passed during and since our last war, have been passed under the advice and in the interest of a class of men who have been allowed to control the moneyed interests of our own and other countries. Tne worst of these laws were passed in direct opposition to your own earnest and elcquent declarations made by you in 1869 in the senate of the United States. You there and then wanted the country in the most emphatic language, showing that a national policy designed to contract the circulating medium would cause gold to appreciate in value, as it has since done, so that gold will now purchase double the amount of real estate that the same amount of gold would have purchased four years age. You were right when you declared “ that every citizen of the United States had conformed bis business to the legal tender clause of the law ” for the regulation of the currency. You were also right, in 1869, when you gave to congress that most timely warning against any attempt to shrink up and contract tbe volume of legal money which the government had been compelled to issue as the only means for the nation's salvation. At that time you declared, in language never to be forgotten, that an act of government intended to contract tbe currency of the country, would paralyze all industries, as it has done. You made it plain that the purchasing power of gold would increase in the same proportion. The contraction has actually shrunk the value of nai estate to a condition where it cannot be sold or mortgages obtained on it for more than bait tbe amount that the same property would have brought four jeurs

ago. Those cruel financial acts of the government have cost the nation thousands of mi lions of dollars, and have brought wretchedness and ruin to the homes of millions of the American peo. le, proving what you said in the s< uate in 1869 to be true. You then declared that such poles “would be an act of folly without example in ancient or modern times.” I here quote from my last published appeal in tehaf of those suffering milions whose lawful money and property have been, I repeat, wrongfully taken from them by a course of legislation in direct violation of the first and most important requirement of the constitution of our country. That constitution, as I have said, covers in a few words the whole of the nation’s wants. It must never be forgotten that there is no effect in nature without a cause equal to its produc:ion. In view of this fact, I have found myself compel! d by an inextinguishable desire to do all in my power to call and fix the attention of tbe American people on a cause that has actually brought upon a great nation all those dire calamities so admirably foretold by you in your speech made in the senate in 1869. The American people have come to know that our country has been subjected to a cruel national financial policy—a policy that has (as I have said) converted the people’s money, that was actually found circulating as a national currency at the close of the war, without cost to either the government or the people, into a national debt. Your speech in the senate was intended to show that a nation’s currency could not be contracted without bringing ruin on the debtors and on tbe laboring classes throughout our country. We may well ask what will the people do when they come to realize the fact that their money has not only been wrongfully taken from them as a circulating medium, but has been converted into a national debt, and that debt has been unjustly released from bearing any part of the burdens of the state or national taxation. To show the ruin that the contraction policy would bring on the country, you declared in the senate “that every citizen of the United States had conformed his business to the legal tender clause of the law,” regulating the currei cy of the country, In my late appeal to all legislators and religious teachers, I have demonstrated a tact that cannot be disproved, viz: that all the legal money paid out by the government for labor and property during the war, was beyond all controversy the people’s money. To establish justice, this money must be given back to them in the purchase of all the outstanding interest-bearing bonds of the government.

By this plan a partial justice can be established and the general welfare of the nation can be surely and effectually promoted. This plan will return to all tbe original holders of government bonds nearly double the amount in the same kind of legal money that was originally paid lor the bonds at the time they were first issued. The holders of these bonds should not complain, after having b en so kindly treated by a government that has altered the laws four times on their urgent solicitation, and on a most ridiculous pretence, namely, that such alterations in the laws were necessary to strengthen the credit of a nation that had just conquered one of the greatest rebellions ever known. All that is now, or ever has been needed to secure a continued prosperity, was and is a national currency, made permanently rece cable for all forms of taxes, duties and debts, public and private. ' It must be just such a money as Secretary Chase declared our greenbacks to be. He said a “ greenback is simply the credit of the American people put in the form of money for circulation among the people whose whole property is represented in its use. When I was secretary of the treasury, the question arese how should the soldiers in the field and the sailors in ships be fed. * * * I found that the banks of the country had suspended specie payment. Whit was Itodo ? The banks wanted me to borrow their credit, or pay interest on their credit. They did not pay gold or propose to pay themselves, but wanted me to buy their notes. I said: “ No, gentlemen! I will take the credit of tho people and cut it up into lithe bits of paper.” This is the true idea of the greenback. It is the credit and the property of the American people made to serve the purposes of money It was that money that saved the nation’s life, when gold and silver had entirely failed to meet the wants of the nation. Our paper money did all this, notwithstanding a part of its purchasing power had been repudiated by an act of government. This money can be made an ever-strengthening bond of national union, by making the people’s money so found, the permanent unfluctuating measure of all values, and never to be increased or diminished only with the increase of the inhabitants of our esuntry. Such a currency can be made as uniform in its purchasing power as the yard, the pound, or the bushel measure.

The constitution of our country has also declared that congress shall hate power “ to make all laws which shall be necessary and proper for carrying into execution the foregoing powers vested by this constitution in the government of the United States, or any department of office thereof.” The Declaration cf Independence expressly says that it was to “secure these rights that governments are instituted among men ” and that- “ whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish It, and to institute a new government, laying its foundation on such principles, and organizing its power in such form as to them shall seem most likely effectually to promote their safety and happiness.” And further, that Declaration states that: “ All experience has shown that mankind are more disposed to suffer, while evils are sufferable, than they are to right themselves by abolishing the forms to which they are accustomed. But, when a long train of abuses and usurpations, pursuing invariably the same object, evinces a design to reduce them under absslu'e despotism, it is their right, it is their duty to provide new guards for their future security.” “Such has been the patient sufferance” of the American people; they have long borne with a course of financial laws that were as cruel as they are unjust. By these laws there has been taken from the people the very money which the government had authorized and paid out in exchange for all the forms df labor and property used and consumed by the government in a four years’ struggle for the national life. This money was actually paid out to the people, as I have said, for “value received” by the government. It was clothed with all the legal attributes of money, and sanctioned as such by the supreme court of the United States. It had become the people’s money for all intents and purposes as effectually as though it had all been paid to them in gold. The government had lost all control over this money so paid to the people, except to tax it as all other property, to meet the current expenses of the government. This money had been used for ye»r3 by the government and the people as a national currency, costing the government nothing but the paper on which it was made, it had been allowed to circulate as legal money until, as you declared when a senator, “that every citizen of the United States had conformed his business to the legal tender law,” regulating the currency of the country. The people are compelled to remember the noble sentiments you expressed in 1869, when you gave to congress and the country that most fearful warning against any attempt to shrink up the volume of legal money which the government had been compelled to issue for the nation’s salvation. You declared on that occasion, in language never to be forgotten, that: ♦ . * ♦ * “Tee appreciation of thejcurrency is a far more distressing operation than senators supposed.” * <* Ton then stated that “ It is not possible to take this voyage without the sorest distress to every person except a capitalist out of debt, or a salaried officer or annuitant. It is a period of loss, danger, lassitude of trade, fall of wages, suspension of enterprise, bankruptcy and disaster. To every railroad it is an addiilon of one-third to the burden of its debts, and more than that deduction to the value of its

stock. • • ♦ * It means the ruin of a'l dealers whose debts become twice their (business) capital, though one-third less than their actual property. It the fa lof a*l agricultural productions, without any great redaction of fixes. What prudent man would dare to build a house, a railroad, a factory, or a barn, with the certain fact before him that the greenbacks he puts into his improvement will in two years be worth 35 per cent more than his improvement is worth. * * When that day comes, all enterprise will be suspended, every bank will have contracted its currency to the lowest limit, and the debtor compelled to meet in coin a debt contracted in currency ; he will find the coin hoarded in the treasury, no adequate representation of coin in circulation, his property shrunk not only to the extent of the agpreciation of the currency, but still more by the artificial scarcely made by the holders of gold. * * * To attempt this task by a surprise on our people, by arresting them in the midst of their lawful business, and applying a new standard of value to their property without any reduction to their debts, or giving them an opportunity to compound with their creditors, or to distribute their losses, vtou'd be an act of folly without an example of evil in modern times. ’ It would be literally impossible for you to havs drawn a more perfect picture of the scenes es wretchedness and ruin that you so manfully opposed in the senate in 1869, a policy that you then declared “ was an act of folly without example in ancient <r modern times.” It seems unaccountable how you, with your views, as expressed, could have drawn the resumption act, and now use all the powers of your mighty mind to consummate a ruin that you so well described as an “ act of folly withont an ex ample in ancient or modern times.” Those frightful evils you then predicted in the senate are now being painfully verified be the many thousands of failures that are annually taking place as the result of the unjust and unconstitutional law®, that have been passed. Laws promising to pay some four or five millions in gold which the government did not possess and could not command. The constitution has never given to congre«s any such unreasonable power. It has made it the duty of congress to “ coin the money and regulate the value ihereof,” without saying whether money should be coined out of gold, silver, copper, nickle, or paper. That this unconstitutional promise to pay money in gold which they could not command, has been further made an occasion for congress to listen to, and adopt, the advice of the men who control the moneyed power of our own and other countries. These men, have, by their arts, succeeded in ob taining from our government a course of financial legislation to advance their own interests as a class. They havo doubled the expenses of the war by their in defeating a financial law in the senate that had passed the house of representatives alter the most mature consideration.

DANGEROUS CLASS. The banks and the moneyed interests of our own and other countries have prevailed on our government to so change the laws as to make the bonds that were at first made payable in natiopal money to be paid in c >io. They next got the law so altered as to make coin mean gold. They then succeeded in getting tie gold bonds relieved from being taxed for any part of the burdens of the state or national government. It should be remembered that all bonds were originally issued to be payable in currency. This currency our government had deliberately depreciated by r,fu ing to receive it for duties on imports, or interest on bonds. And then our government allowed war taxes to continue until they had taken from the people the very money the government had stamped and paid out, as so many dollars of real value, made legal money to be used as a national currency to enable the people to exchange commodities, and furnish all the supplies that were needed in a four years’ struggle for the nation’s life. W hen that life was saved, the people had become the rightful owners of both their currency and their country. Qur government had no constitutional right to invalidate contracts by lessening the volume of the national currenc -, after the same had been issued and allowed to circulate as legal money in the payment of debts for so many years.

Such money having been paid out by the government for “value received.” cannot be lessened in volume without invalidating ccntracts. This our government has done by having drawn from the people their money, which represents all forms of labor and property which the people had given in exchange for the money they received. Was it not a most absurd act of legislation to invite foreign capital, in the shape of gold to take up our good money at 40 and 60 cents on the dollar, and turn that money into a government bond at par, payable both principal and interest in gold 1 Was ever a nation more deliberately and cruelly put under a heavy yoke of bondadge by its rulers ? All these unjust acts must be rescinded. The peoplejlwill not submit to them when they come to know their nature and purpo e. It must be manifest to all, that commerce cannot be regulated wirh foreign nations, and among the several states without a national s stem of money as a standard, over which congress can exercise an entire control, ibis can never be done by the use of geld whi.e congress allows local hanks to expand and contract, appreciate and depreciate the money of the country in their own interests as a class. THOMAS JEFFERSON WAS BIGHT when he said that “ bank paper mu.-t be sup-PBES-SED, AND THE CIRCULATING MEDIUM MUST BE RESTORED TO THU NATION TO WHOM IT EBOTERLY belongs.” He wisely declared that “it is the only fund on which the government can rely for loans; it is the only resource which can never fail them, and it is an abundant one for every necessary purpose.” CONGRESS HAS NO EXCUSE. I find it impossible to frame an apology for a congress that could make an unconstitutional promise to pay hundreds of millions in gold which they could not command, instead of promising to receive such money as the government was compelled to issue as “the only resources which can never fail them.”

Money so issued and accepted by the people should have been considers >, as it was, the most sacred treasure that our count) y had ever po sessed. It should have been held as more especially precious after it had fed and clothed our armies, and had carried our country safely through a most terrible war, proving to the world that President Grant was right when declared the money so iesued by the government was the “best currency our country had ever possessed,” and that “there was no more in circulation than was needed for the dullest period of the year.” If our government had taken the advice cf Franklin, Jefferson, Calhoun and Webster, tn the enactment of financial laws, they would nover have put our country in the power of the most dangerous community of banks that obtained power in any country, '"hey would also have saved to our country the one-half of the cost < f the late war, and the disgrace of being compelled to sell our nation’s bonds at some fifty or sixty per cent, below the face value of the bonds. Senator Beck, of Kentucky, in the senate of the United States, has drawn for the American people

A MOST FRIGHTFUL PICTURE of the course of special legislation, that has taken from the people, as I have before stated, the people’s money, and has converted the same into a national debt. The following startling amounts have been wrung from tne toiling masses of the American people, leaving the debt in the main as large as ever. The senator says “ the bondholders had, up to 1869, received SLCO,COO,(hO of prefit before they got the principal of their bonds made payable in gold!” It can be shown by the treasurer’s report, from year to year, giving the amount of bonds sold each year, and the premium on gold from 1862 to 1869, that the purchase of the bonds with paper at its face value, and the purchase ot the paper at the discounts gave a profit to the bondholders as follows:” AN ACCOUNT TF THE BONDHOLDERS' CLVAB PROFITS, arising from no investments at all, may therefore be stated in the following tabular form: 1862$ 28,138,989 1863 94,555,713 1864 366,554,532 1865 110,159,367 1866 53,757,183 1867 167,915,741 1868 253,159,765 On acc’t of 5 per cent bonds 98,297,864 J0ta151,012,536,204 This most remarkable statement was, as Senator Beck declared, “carefully and truthfully prepared.” The proof is in the official records. “It will satisfy the country,” said the senator, “ and ought to satisfy the bondholders and their advocates that they ought not to insult a suffering people whose hard earnings have gone to enrich them, by any complaint of want of good faith to them in the effort we are making to save the country from bankruptcy.” As the present secretary of the treasury yon have before you all the facts referred to in Spalding’s and other histories of the public debt. On June 30th, 1864, there were then outstanding, United States notes: Greenbacks $131,178,670 80 Postal fractional currency 22,894,877 25 Interest bearing legal tenders 164,671,877 25 Certificates of indebtedness 160,720,300 00 National Bank notes 25,825,695 00 Old State Bank circulation 135,000,000 00 $944,190,693 09 Seven-thirty treasury notes, temporary deposits for which certificates were issued $72,856,160 CO The record shows that there were oustanding in October, 1865, SB3 ',- 000,000 of seven-thirty treasury notes, which, Assistant Secretary Spinner states, were engraved, stamped, and paid out to the soldiers as legal tender money, at the close of the war 5830,000,000,000

Making 51,955,377,634 41 This amount of legal money was paid out by the government and accepted by the people asjso many dollars of real value, and bad thereby become the people’s money, which, as I said before, President Grant said, “ was the best currency that our country had ever possessed. And that, “ there was no more in circulation than was needed for the dullest season of the year.’ Our government, in addition to all the other acts of class legislation, has taken from the American people their small currency that was costing them nothing, and has put in its place, unsolicited by the people, a more inconvenient silver currency, thereby creating a debt of some forty millions of dollars to be paid by the already overtaxed people of our country.

Mi th regard to the demonetization of silver, every intelligent man must see, that inaspauch as

silver now forme more than one-half of the coin money of the world, that the < fleet of demonetizing silver must not only lessen the volume of the world’s money, but must appreciate the value of gold in proportion as the value of silver has been reduced. The plan for demonetizing silver is said to have been first presented to the great bankers of Europe, assembled st the Paris expedition. It required but little examination to show them that the demonetization of silver would appreciate the value of gold, and add hundreds of millions to their uealth, if they could only persuadmhe American government to join with them in the demonetization of silver. Those bankers appo’nted a committee to visit onr government foi the accomplishment of their object, which as the Commercial Record states “ The suggestion of the house committee made by the gentlemen from England in regard to the demonetization of silver, was incorporated into the house bill and passed ” NOTHING GAN BE MORI IMPORTANT for us as a nation than to ascertain and remove a cause that is shrinking the values without shrinking debts in the same proportion. Our national policy, in trying to force specie payments on a debtor country, is now producing a similar condition of wretchedness to that which was brought on England, by their attempt to force specie payment on that country, after a suspension of more than twenty years. Daring all ihat time their paper money had not only carried their country through their wars with Napoleon, during more than twenty years of suspension of specie payment, but that same paper mon y had secured to England the greatest national prosperity ever known in that country. This policy, according to Sir Archibald Allison, brought on England a greater scene of widespread bankruptcy and ruin than all the wars, pestilence and famines than had ever afflicted that country. Notwithstanding the warnings of such an example, Mr. McCulloch, in his address, made at the banquet given by the chamber of commerce in New York, spoke bosstingly of his earnest efforts, both personally and in writing with member s of congress ifi trying to persuade them to allow him to take out of circulation the people's money, which (in his address) he states “ had all the legal attributes of money.” He stated that in the very year in wnich the war closed, the REDUCTION OF THE DEBT WAS COMMENCED, and this reduction has been steadily continued, to the amazement of foreign nations. He adds: “ In none of the treasury statements which I have seen, since the advent of the administration, has any mention been made of the reduction of the debt, previous to the present one. * * * A person looking at one of these statements would suppose that the reduction of the debt was commenced with Gen. Grant’s adm'nlstratlon, while in fa't, the previous reduction had been reported of two hundred and fifty millions of dollars, according to the books and published s'ate meats of the treasury, while a larger sum than this was paid to the war and navy department, which did pot yet appear on the bocks of the department.” Thus does Mr. McOnlloch speak of having contracted and taken out of the currency of the country, during his administration, some five hundred millions of dollars, that ha I been paid out by ths government and r< ce’.ved by the people as money, possessing, he declared, '‘all the legal attributes of money. ” SECRETARY MCCULLOCH’S GREAT MISTAKE consisted in his regarding the money, actually authorized and paid out by the government for value received, as something to be got rid of as soon as possible. Mr. McCulloch stated at the banquet, that this legal money that was then serving the country so well, “gave him more anxi. ty than all the rest of national debt.” It seemed that it cost him much writing and a great d al of personal effort to persuade senators and members of congress to show him to take from the American people, by a continuation of war taxes, the very money that the people had received as dollars in payment for all the labor and property that had been consumed in the prosecution of the war. I do not wonder that Mr. McCulloch found that “It required the strongest kind of personal ant written arguments ” to persuade senators and members oj congress to allow him to take from-the people their money, and convert the same into a national debt, alter the same money had been allowed to circulate until (as I have said) it had bought and sold many times more in value than the whole property of the nation. It crime is to be measured by the misery it produces, the act of taking from our people their money, and converting it into a national debt, must rank as one of the most unjust and cruel acts ever known to any civilized legislation. Ido most HEARTILY UNITE WITH SENATOR JONES, when he says: “ the present is the acceptable time to undo the unwitting and blundering work of 1873, and to render our legislation on the subject of money conformable to the constitution of our country. * * We cannot, we dare not, avoid speedy action on ybe subject. Not only does reason, justice, and authority, unite in urging us to retrace our steps, but the organic law commands us to do so; and the presence of peril enjoins what the law commands.” The claims of a common humanity, with all that can move the manhood of the American citizen, demand of our government the return to the people of their currency. WF. MUST GET BACK OUB CURRENCY. This can be done in a way that will restore prosper!’y to the paralyzed industries of our suffering country, and establish justice in obedience to that first and most imperious requirement of the constitution. It will only requue an act of congress declaring that the people s money actually found in circulation at the close of the war, shall be returned, as I have said in the purchase ut a.l the outetandlog interest bearing bonds of the government. Such a national policy will put ihe tools of trade again in the hands of the people, and will enable tlfem to work out their salvation from the enslavement of an interest bearing debt, created by taking their own money wiongfullv from them, and then by converting the same into national interest. bearing bonds, that now hang like a millstone on the neck of the nation. In the fervent des re of promoting the welfare of onr common coniury, I subscribe myself, Yours respectfully, Peper Cooper.