“From the facts already exhibited in reference to our industrial revolution, and from the foregoing analysis of the nature and functions of currency, it is manifest:
“1. That the remarkable prosperity of all industrial enterprises during the war was not caused by the abundance of currency, but by the unparalleled demand for every product of labor.
“2. That the great depression of business, the stagnation of trade, the ‘hard times’ which have prevailed during the past year, and which still prevail, have not been caused by an insufficient amount of currency, but mainly by the great falling off of the demand for all the products of labor, compared with the increased supply since the return from war to peace.
“I subjoin a table, carefully made up from the official records, showing the amount of paper money in the United States at the beginning of each year from 1834 to 1868 inclusive. The fractions of millions are omitted:
| 1834 | $ 95,000,000 |
| 1835 | 104,000,000 |
| 1836 | 140,000,000 |
| 1837 | 149,000,000 |
| 1838 | 116,000,000 |
| 1839 | 135,000,000 |
| 1840 | 107,000,000 |
| 1841 | 107,000,000 |
| 1842 | 84,000,000 |
| 1843 | 59,000,000 |
| 1844 | 75,000,000 |
| 1845 | 90,000,000 |
| 1846 | 105,000,000 |
| 1847 | 106,000,000 |
| 1848 | 129,000,000 |
| 1849 | 115,000,000 |
| 1850 | 131,000,000 |
| 1851 | 155,000,000 |
| 1852 | 150,000,000 |
| 1853 | 146,000,000 |
| 1854 | 205,000,000 |
| 1855 | 187,000,000 |
| 1856 | 196,000,000 |
| 1857 | 215,000,000 |
| 1858 | 135,000,000 |
| 1859 | 193,000,000 |
| 1860 | 207,000,000 |
| 1861 | 202,000,000 |
| 1862 | 218,000,000 |
| 1863 | 529,000,000 |
| 1864 | 636,000,000 |
| 1865 | 948,000,000 |
| 1866 | 919,000,000 |
| 1867 | 852,000,000 |
| 1868 | 767,000,000 |
“The table I have submitted shows how perfect an index the currency is of the healthy or unhealthy condition of business, and that every great financial crisis, during the period covered by the table, has been preceded by a great increase, and followed by a great and sudden decrease, in the volume of paper money. The rise and fall of mercury in the barometer is not more surely indicative of an atmospheric storm, than is a sudden increase or decrease of currency indicative of financial disaster. Within the period covered by the table, there were four great financial and commercial crises in this country. They occurred in 1837, 1841, 1854, and 1857. Observe the volume of paper currency for those years: On the first day of January, 1837, the amount had risen to $149,000,000, an increase of nearly fifty per cent. in three years. Before the end of that year, the reckless expansion, speculation, and over-trading which caused the increase, had resulted in terrible collapse; and on the first of January, 1838, the volume was reduced to $116,000,000. Wild lands, which speculation had raised to fifteen and twenty dollars per acre, fell to one dollar and a-half and two dollars, accompanied by a corresponding depression in all branches of business. Immediately after the crisis of 1841, the bank circulation decreased twenty-five per cent., and by the end of 1842 was reduced to $58,500,000, a decrease of nearly fifty per cent.
“At the beginning of 1853 the amount was $146,000,000. Speculation and expansion had swelled it to $205,000,000 by the end of that year, and thus introduced the crash of 1854. At the beginning of 1857 the paper money of the country reached its highest point of inflation up to that time. There were nearly $215,000,000, but at the end of that disastrous year the volume had fallen to $135,000,000, a decrease of nearly forty per cent. in less than twelve months. In the great crashes preceding 1837 the same conditions are invariably seen—great expansion, followed by a violent collapse, not only in paper money, but in loans and discounts; and those manifestations have always been accompanied by a corresponding fluctuation in prices.
“In the great crash of 1819, one of the severest this country ever suffered, there was a complete prostration of business. It is recorded in Niles’s Register for 1820 that, in that year, an Ohio miller sold four barrels of flour to raise five dollars, the amount of his subscription to that paper. Wheat was twenty cents per bushel, and corn ten cents. About the same time Mr. Jefferson wrote to Nathaniel Macon:
“‘We have now no standard of value. I am asked eighteen dollars for a yard of broadcloth which, when we had dollars, I used to get for eighteen shillings.’
“But there is one quality of such a currency more remarkable than all others—its strange power to delude men. The spells and enchantments of legendary witchcraft were hardly so wonderful. Most delusions can not be repeated; they lose their power after a full exposure. Not so with irredeemable paper money. From the days of John Law its history has been a repetition of the same story, with only this difference: No nation now resorts to its use except from overwhelming necessity; but whenever any nation is fairly embarked, it floats on the delusive waves, and, like the lotus-eating companions of Ulysses, wishes to return no more.