The monetary disturbance which has occurred, and is now to a certain extent acting very injuriously upon trade, I attribute to the great changes which the Governments of Europe are making in reference to their standard of value. Our gold standard is not the cause of our commercial prosperity, but the consequence of that prosperity. It is quite evident that we must prepare ourselves for great convulsions in the money market, not occasioned by speculation or any of the old causes which have been alleged, but by a new cause with which we are not sufficiently acquainted.
And again in March, 1879, when the effects of the decreasing volume of money were making themselves more and more felt, Mr. Disraeli, then Lord Beaconsfield, said:
All this time the produce of the gold mines of Australia and California has been regularly diminishing, and the consequence is that, while these great alterations on the continent in favor of a gold currency have been made, notwithstanding that increase of population which alone requires a considerable increase of currency to carry on its transactions, the amount of the currency itself is yearly diminishing, until a state of affairs has been brought about by gold production exactly the reverse of that which it produced at first. Gold is every day appreciating in value, and as it appreciates the lower become prices. It is not impossible that, as affairs develop, the country may require that some formal investigation should be made of the causes which are affecting the value of the precious metals, and the effect which the change in the value of the precious metals has upon the industries of the country, and upon the continual fall of prices.
In reaching their conclusions, Bismarck and others ignored the fundamental principle that a gold supply that might be sufficient for one country with a gold standard, and might even result in a measure of prosperity to that country, would be wholly insufficient if other countries should adopt the same standard and should enter upon a keen competition and rivalry for the acquisition of gold.
The adoption of that standard by Germany and France was therefore not only destructive of their own prosperity, but was a stunning blow at the prosperity of England and all other gold-using countries. In taking England for his model, Bismarck had not the condition of the toiling masses before his mind, but the glamour of prosperity which surrounded the creditor-barons.
The unprejudiced observer can not fail to perceive that the $370,000,000 coined under the Limited Coinage Act of the United States of 1878, supplementing the gold stock of the western world, postponed great industrial and financial crises. But the elements of these crises are gathering, and, unless relief be soon forthcoming, will burst upon the world with crushing severity.
DEMONETIZATION IN THE UNITED STATES.
If we are surprised that the sordid selfishness of the privileged classes of Europe should have induced them to perpetrate so gross an act of injustice, we are reminded that the legislation of monarchical countries has usually been controlled in the interest of the privileged classes. But what shall be said in defense of the demonetization of silver by the United States? No such stupendous act of folly and injustice was ever before perpetrated by the representatives of a free people.
Our position differed materially from that of Great Britain. This was not a creditor nation. Our people did not, and do not, own thousands of millions of dollars of foreign bonds, on which to receive semi-annual interest in a constantly appreciating money, which would have to be paid from the current earnings of foreign labor. Instead, therefore, of our demonetization unjustly enriching our creditor-classes at the expense of foreigners, it enabled the creditors at home here to rob and despoil the debtors among their own countrymen. Instead of despoiling the Canadian, the Australian, the East Indian, the Egyptian, or the Turk, the spoliation arranged for by our adoption of the gold standard was a spoliation of the debtors in our own communities. In so far, however, as our debt was held abroad, it provided for a spoliation of our citizens by the foreign bondholders also. And as nearly all our public debt was so held, we had presented to us in 1873 the extraordinary spectacle of representatives, sent here to enact laws for the welfare and advancement of our own people, devoting all their energies, whether aware of it or not, to the upbuilding of the fortunes of the moneyed aristocracies of other countries, at the expense of the producers of the United States.
CONDITION OF THE COUNTRY AT THE TIME.