As a consequence, there could be no real, solid foundation for business.
Property commenced to decline; that is to say, it commenced to resume; that is to say, it began to be rated at its real instead of at its speculative value.
Land is worth what it will produce, and no more. It may have speculative value, and, if the prophecy is fulfilled, the man who buys it may become rich, and if the prophecy is not fulfilled, then the land is simply worth what it will produce. Lots worth from five to ten thousand dollars apiece suddenly vanished into farms worth twenty-five dollars per acre.
These lots resumed. The farms that before that time had been considered worth one hundred dollars per acre, and are now worth twenty or thirty, have simply resumed. Magnificent residences supposed to be worth one hundred thousand dollars, that can now be purchased for twenty-five thousand, they have simply resumed. The property in the United States has not fallen in value, but its real value has been ascertained. The land will produce as much as it ever would, and is as valuable to-day as it ever was; and every improvement, every invention that adds to the productiveness of the soil or to the facilities for getting that product to market, adds to the wealth of the nation.
As a matter of fact, the property kept pace with what we were pleased to call our money. As the money depreciated, property appreciated; as the money appreciated, property depreciated. The moment property began to fall speculation ceased. There is but little speculation upon a falling market. The stocks and bonds, based simply upon ideas, became worthless, the collaterals became dust and ashes.
At the close of the war, when the Government ceased to be such a vast purchaser and consumer, many of the factories had to stop. When the crash came the men stopped digging ore; they stopped felling the forest; the fires died out in the furnaces; the men who had stood in the glare of the forge were in the gloom of want. There was no employment for them. The employer could not sell his product; business stood still, and then came what we call the hard times. Our wealth was a delusion and illusion, and we simply came back to reality. Too many men were doing nothing, too many men were traders, brokers, speculators. There were not enough producers of the things needed; there were too many producers of the things no one wished. There needed to be a re-distribution of men.
Many remedies have been proposed, and chief among these is the remedy of fiat money. Probably no subject in the world is less generally understood than that of money. So many false definitions have been given, so many strange, conflicting theories have been advanced, that it is not at all surprising that men have come to imagine that money is something that can be created by law. The definitions given by the hard-money men themselves have been used as arguments by those who believe in the power of Congress to create wealth. We are told that gold is an instrumentality or a device to facilitate exchanges. We are told that gold is a measure of value. Let us examine these definitions.
"_Gold is an instrumentality or device to facilitate exchanges._"
That sounds well, but I do not believe it. Gold and silver are commodities. They are the products of labor. They are not instrumentalities; they are not devices to facilitate exchanges; they are the things exchanged for something else; and other things are exchanged for them. The only device about it to facilitate exchanges is the coining of these metals. Whenever the Government or any government certifies that in a certain piece of gold or silver there are a certain number of grains of a certain fineness, then he who gives it knows that he is not giving too much, and he who receives, that he is receiving enough, so that I will change the definition to this:
The _coining_ of the precious metals is a device to facilitate exchanges.
The precious metals themselves are property; they are merchandise; they are commodities, and whenever one commodity is exchanged for another it is barter, and gold is the last refinement of barter.
The second definition is:
"_Gold is the measure of value_."
We are told by those who believe in fiat money that gold is a measure of value just the same as a half bushel or a yardstick.
I deny that gold is a measure of value. The yardstick is not a measure of value; it is simply a measure of quantity. It measures cloth worth fifty dollars a yard precisely as it does calico worth four cents. It is, therefore, not a measure of value, but of quantities. The same with the half bushel. The half bushel measures wheat precisely the same, whether that wheat is worth three dollars or one dollar. It simply measures quantity; not quality, or value. The yardstick, the half bushel, and the coining of money are all devices to facilitate exchanges. The yardstick assures the man who sells that he has not sold too much; it assures the man who buys that he has received enough; and in that way it facilitates exchanges. The coining of money facilitates exchange, for the reason that were it not coined, each man who did any business would have to carry a pair of scales and be a chemist.
It matters not whether the yardstick or half bushel are of gold, silver, or wood, for the reason that the yardstick and half bushel are not the things bought. We buy not them, but the things they measure.
If gold and silver are not the measure of value, what is? I answer--intelligent labor. Gold gets its value from labor. Of course, I cannot account for the fact that mankind have a certain fancy for gold or for diamonds, neither can I account for the fact that we like certain things better than others to eat. These are simply facts in nature, and they are facts, whether they can be explained or not. The dollar in gold represents, on the average, the labor that it took to dig and mint it, together with all the time of the men who looked for it without finding it. That dollar in gold, on the average, will buy the product of the same amount of labor in any other direction.
Nothing ever has been money, from the most barbarous to the most civilized times, unless it was a product of nature, and a something to which the people among whom it passed as money attached a certain value, a value not dependent upon law, not dependent upon "fiat" in any degree.
Nothing has ever been considered money that man could produce.
A bank bill is not money, neither is a check nor a draft. These are all devices simply to facilitate business, but in or of themselves they have no value.
We are told, however, that the Government can create money. This I deny.
The Government produces nothing; it raises no wheat, no corn; it digs no gold, no silver. It is not a producer, it is a consumer.
The Government cannot by law create wealth. And right here I wish to ask one question, and I would like to have it answered some time. If the Government can make money, if it can create money, if by putting its sovereignty upon a piece of paper it can create absolute money, why should the Government collect taxes? We have in every district assessors and collectors; we have at every port customhouses, and we are collecting taxes day and night for the support of this Government. Now, if the Government can make money itself, why should it collect taxes from the poor? Here is a man cultivating a farm--he is working among the stones and roots, and digging day and night; why should the Government go to that man and make him pay twenty or thirty or forty dollars taxes when the Government, according to the theory of these gentlemen, could make a thousand-dollar fiat bill quicker than that man could wink? Why impose upon industry in that manner? Why should the sun borrow a candle?
And if the Government can create money, how much should it create, and if it should create it who will get it? Money has a great liking for money. A single dollar in the pocket of a poor man is lonesome; it never is satisfied until it has found its companions. Money gravitates towards money, and issue as much as you may, as much as you will, the time will come when that money will be in the hands of the industrious, in the hands of the economical, in the hands of the shrewd, in the hands of the cunning; in other words, in the hands of the successful.
The other day I had a conversation with one of the principal gentlemen upon that side, and I told him, "Whenever you can successfully palm off on a man a bill of fare for a dinner, I shall believe in your doctrine; and when I can satisfy the pangs of hunger by reading a cook-book, I shall join your party." Only that is money which stands for labor. Only that is money which will buy, on the average, in all other directions the result of the same labor expended in its production. As a matter of fact, there is money enough in the country to transact the business.
Never before in the history of our Government was money so cheap; that is to say, was interest so low; never. There is plenty of money, and we could borrow all we wished had we the collaterals. We could borrow all we wish if there was some business in which we could embark that promised a sure and reasonable return. If we should come to a man who kept a ferry, and find his boat on a sandbar and the river dry, what would he think of us should we tell him he had not enough boat? He would probably reply that he had plenty of boat, but not enough water. We have plenty of money, but not enough business. The reason we have not enough business is, we have not enough confidence, and the reason we have not confidence is because the market is slowly falling, and the reason it is slowly falling is that things have not yet quite resumed; that we have not quite touched the absolute bedrock of valuation. Another reason is because those that left the cultivation of the soil have not yet all returned, and they are living, some upon their wits, some upon their relatives, some upon charity, and some upon crime.
The next question is: Suppose the Government should issue a thousand millions of fiat money, how would it regulate the value thereof? Every creditor could be forced to take it, but nobody else. If a man was in debt one dollar for a bushel of wheat, he could compel the creditor to take the fiat money; but if he wished to buy the wheat, then the owner could say, "I will take one dollar in gold or fifty dollars in fiat money, or I will not sell it for fiat money at any price." What will Congress do then? In order to make this fiat money good it will have to fix the price of every conceivable commodity; the price of painting a picture, of trying a lawsuit, of chiseling a statue, the price of a day's work; in short, the price of every conceivable thing. This even will not be sufficient. It will be necessary, then, to provide by law that the prices fixed shall be received, and that no man shall be allowed to give more for anything than the price fixed by Congress.
Now, I do not believe that any Congress has sufficient wisdom to tell beforehand what will be the relative value of all the products of labor.
When the volume of currency is inflated it is at the expense of the creditor class; when it is contracted it is contracted at the expense of the debtor class. In other words, inflation means going into debt; contraction means the payment of the debt.
A gold dollar is a dollar's worth of gold.
A real paper dollar is a dollar's worth of paper.
Another remedy has been suggested by the same persons who advocate fiat money. With a consistency perfectly charming, they say it would have been much better had we allowed the Treasury notes to fade out. Why allow fiat money to fade out when a simple act of Congress can make it as good as gold? When greenbacks fade out the loss falls upon the chance holder, upon the poor, the industrious, and the unfortunate. The rich, the cunning, the well-informed manage to get rid of what they happen to hold. When, however, the bills are redeemed, they are paid by the wealth and property of the whole country. To allow them to fade out is universal robbery; to pay them is universal justice. The greenback should not be allowed to fade away in the pocket of the soldier or in the hands of his widow and children. It is said that; the Continental money faded away. It was and is a disgrace to our forefathers. When the greenback fades away there will fade with it honor from the American heart, brain from the American head, and our flag from the air of heaven.
A great cry has been raised against the holders of bonds. They have been denounced by every epithet that malignity can coin. During the war our bonds were offered for sale and they brought all that they then appeared to be worth. They had to be sold or the Rebellion would have been a success. To the bond we are indebted as much as to the greenback. The fact is, however, we are indebted to neither; we are indebted to the soldiers. But every man who took a greenback at less than gold committed the same crime, and no other, as he who bought the bonds at less than par in gold. These bonds have changed hands thousands of times. They have been paid for in gold again and again. They have been bought at prices far above par; they have been laid away by loving husbands for wives, by toiling fathers for children; and the man who seeks to repudiate them now, or to pay them in fiat rags, is unspeakably cruel and dishonest. If the Government has made a bad bargain it must live up to it. If it has made a foolish promise the only way is to fulfill it.
A dishonest government can exist only among dishonest people.
When our money is below par we feel below par.
We cannot bring prosperity by cheapening money; we cannot increase our wealth by adding to the volume of a depreciated currency. If the prosperity of a country depends upon the volume of its currency, and if anything is money that people can be made to think is money, then the successful counterfeiter is a public benefactor. The counterfeiter increases the volume of currency; he stimulates business, and the money issued by him will not be hoarded and taken from the channels of trade.
During the war, during the inflation--that is to say, during the years that we were going into debt--fortunes were made so easily that people left the farms, crowded to the towns and cities. Thousands became speculators, traders, and merchants; thousands embarked in every possible and conceivable scheme. They produced nothing; they simply preyed upon labor and dealt with imaginary values. These men must go back; they must become producers, and every producer is a paying consumer. Thousands and thousands of them are unable to go back. To a man who begs of you a breakfast you cannot say, "Why don't you get a farm?" You might as well say, "Why don't you start a line of steamships?" To him both are impossibilities. They must be helped.
We should all remember that society must support all of its members, all of its robbers, thieves, and paupers. Every vagabond and vagrant has to be fed and clothed, and society must support in some way all of its members. It can support them in jails, in asylums, in hospitals, in penitentiaries; but it is a very costly way. We have to employ judges to try them, juries to sit upon their cases, sheriffs, marshals, and constables to arrest them, policemen to watch them, and it may be, at last, a standing army to put them down. It would be far cheaper, probably, to support them all at some first-class hotel. We must either support them or help them support themselves. They let us go upon the one hand simply to take us by the other, and we can take care of them as paupers and criminals, or, by wise statesmanship, help them to be honest and useful men. Of all the criminals transported by England to Australia and Tasmania, the records show that a very large per cent.--something over ninety--became useful and decent people. In Australia they found homes; hope again spread its wings in their breasts. They had different ambitions; they were removed from vile and vicious associations. They had new surroundings; and, as a rule, man does not morally improve without a corresponding improvement in his physical condition.
One biscuit, with plenty of butter, is worth all the tracts ever distributed.
Thousands must be taken from the crowded streets and stifling dens, away from the influences of filth and want, to the fields and forests of the West and South. They must be helped to help themselves.
While the Government cannot create gold and silver, while it cannot by its fiat make money, it can furnish facilities for the creation of wealth. It can aid in the distribution of products, and in the distribution of men; it can aid in the opening of new territories; it can aid great and vast enterprises that cannot be accomplished by individual effort. The Government should see to it that every facility is offered to honorable adventure, enterprise and industry. Our ships ought to be upon every sea; our flag ought to be flying in every port.
Our rivers and harbors ought to be improved. The usefulness of the Mississippi should be increased, its banks strengthened, and its channel deepened. At no distant day it will bear the commerce of a hundred millions of people. That grand river is the great guaranty of territorial integrity; it is the protest of nature against disunion, and from its source to the sea it will forever flow beneath one flag.
The Northern Pacific Railway should be pushed to completion. In this way labor would be immediately given to many thousands of men. Along the line of that thoroughfare would spring up towns and cities; new communities with new surroundings; and where now is the wilderness there would be thousands and thousands of happy homes.
The Texas Pacific should also be completed. A vast agricultural and mineral region would be opened to the enterprise and adventure of the American people. Probably Arizona holds within the miserly clutches of her rocks greater wealth than any other State or territory of the world.
The construction of that road would put life and activity into a hundred industries. It would give employment to many thousands of people, and homes at last to many millions. It would cause the building of thousands of miles of branches to open, not only new territory, but to connect with roads already built. It would double the products of gold and silver, open new fields to trade, create new industries, and make it possible for us to supply eight millions of people in the Republic of Mexico with our products. The construction of this great highway will enable the Government to dispense with from ten to fifteen regiments of infantry and cavalry now stationed along the border. People enough will settle along this line to protect themselves. It will permanently settle the Indian question, saving the people millions each year. It will effectually destroy the present monopoly, and in this way greatly increase production and consumption. It will double our trade with China and Japan, and with the Pacific States as well. It will settle the Southern question by filling the Southern States with immigrants, diversifying the industries of that section, changing and rebuilding the commercial and social fabric; it will do away with the conservatism of regret and the prejudice born of isolation. It will transmute to wealth the unemployed muscle of the country. It will rescue California from the control of a single corporation, from the government of an oligarchy united, watchful, despotic, and vindictive. It will liberate the farmers, the merchants, and even the politicians of the Pacific coast.
Besides, it must not be forgotten so to frame the laws and charters that Congress shall forever have the control of fares and freights. In this way the public will be perfectly protected and the Government perfectly secured.
Look at the map, and you will see the immense advantages its construction will give to the entire country, not only to the South, but to the East and West as well. It is one hundred and fifty miles nearer from Chicago to San Diego than to San Francisco. You will see that the whole of Texas, a State containing two hundred and ten thousand square miles; a State four times as large as Illinois, five times as large as New York, capable of supporting a population of twenty millions of people, is put in direct and immediate communication with the whole country. Territory to the extent of nearly a million square miles will be given to agriculture, trade, commerce, and mining, by the construction of this line.
Let this road be built, and we shall feel again the enthusiasm born of enterprise. In the vast stagnation there will be at last a current.
Something besides waiting is necessary to secure, or to even hasten, the return of prosperity. Secure the completion of this line and extend the time for building the Northern Pacific, and confidence and employment will return together.
More men must cultivate the soil. In the older States lands are too high. It requires too much capital to commence. There are so many failures in business; so many merchants, traders, and manufacturers have been wrecked and stranded upon the barren shores of bankruptcy, that the people are beginning to prefer the small but certain profits of agriculture to the false and splendid promises of speculation. We must open new territories; we must give the mechanics now out of employment an opportunity to cultivate the soil--not as day-laborers but as owners; not as tenants, but as farmers. Something must be done to develop the resources of this country. With the best lands of the world; with a population intellectual, energetic, and ingenious far beyond the average of mankind; with the richest mines of the globe; with plenty of capital; with a surplus of labor; with thousands of arms folded in enforced idleness; with billions of gold asking to be dug; with millions of acres waiting for the plow, thousands upon thousands are in absolute want.
New avenues must be opened. All our territory must be given to immigration. Greater facilities must be offered. Obstacles that cannot be overcome by individual enterprise must be conquered by the Government for the good of all. Every man out of employment is impoverishing the country. Labor transmutes muscle into wealth. Idleness is a rust that devours even gold. For five years we have been wasting the labor of millions--wasting it for lack of something to do. Prosperity has been changed to want and discontent. On every hand the poor are asking for work. That is a wretched government where the honest and industrious beg, unsuccessfully, for the right to toil; where those who are willing, anxious, and able to work, cannot get bread. If everything is to be left to the blind and heartless working of the laws of supply and demand, why have governments? If the nation leaves the poor to starve, and the weak and unfortunate to perish, it is hard to see for what purpose the nation should be preserved. If our statesmen are not wise enough to foster great enterprises, and to adopt a policy that will give us prosperity, it may be that the laboring classes, driven to frenzy by hunger, the bitterness of which will be increased by seeing others in the midst of plenty, will seek a remedy in destruction.
The transcontinental commerce of this country should not be in the clutch and grasp of one corporation. All sections of the Union should, as far as possible, be benefited. Cheap rates will come, and can be maintained only by competition. We should cultivate commercial relations with China and Japan. Six hundred millions of people are slowly awaking from a lethargy of six thousand years. In a little while they will have the wants of civilized men, and America will furnish a large proportion of the articles demanded by these people. In a few years there will be as many ships upon the Pacific as upon the Atlantic. In a few years our trade with China will be far greater than with Europe. In a few years we will sustain the same relation to the far East that Europe once sustained to us. America for centuries to come will supply six hundred millions of people with the luxuries of life. A country that expects to control the trade of other countries must develop its own resources to the utmost. We have pursued a small, a mean, and a penurious course.
Demagogues have ridden into office and power upon the cry of economy, by opposing every measure looking to the improvement of the country, by endeavoring to see how cheaply nothing could be done. A government, like an individual, should live up to its privileges; it should husband its resources, simply that it may use them. A nation that expects to control the commerce of half a world must have its money equal with gold and silver. It must have the money of the world.
Whenever the laboring men are out of employment they begin to hate the rich. They feel that the dwellers in palaces, the riders in carriages, the wearers of broadcloth, silk, and velvet have in some way been robbing them. As a matter of fact, the palace builders are the friends of labor. The best form of charity is extravagance. When you give a man money, when you toss him a dollar, although you get nothing, the man loses his manhood. To help others help themselves is the only real charity. There is no use in boosting a man who is not climbing. Whenever I see a splendid home, a palace, a magnificent block, I think of the thousands who were fed--of the women and children clothed, of the firesides made happy.
A rich man living up to his privileges, having the best house, the best furniture, the best horses, the finest grounds, the most beautiful flowers, the best clothes, the best food, the best pictures, and all the books that he can afford, is a perpetual blessing.
The prodigality of the rich is the providence of the poor.