'Arts have been tried on various occasions in the world to raise credit; art has been found able with more ease to destroy credit than to raise it. The force of art, assisted by the punctual, fair, and just dealing abovesaid, may have done much to form a credit upon the face of things, but we find still the honor would have done it without the art, but never the art without the honor. Nor will money itself, which, Solomon says, answers all things, purchase this thing called credit or restore it when lost. . . .
'Our credit in this case is a public thing. It is rightly called by some of our writers national credit. The word denominates its original. It is produced by the nation's probity, the honor and exact performing national engagements.'
"And, sir, passing from considerations of public honor, there are many reasons of public policy which forbid the repeal of the act of 1875. That act was generally regarded as the settlement of a financial policy by which at least the party in power is bound, and upon the faith of which business men have conducted their affairs and made their contracts. Debts have been contracted and paid with the expectation that at the time fixed the gold standard would measure all obligations, and a repeal of the act would now reopen all the wild and dangerous speculation schemes that feed and fatter upon depreciated paper money. The influence that secures this repeal will not stop here. If we can recall our promise to pay our notes outstanding why should we not issue more? If we can disregard our promise to pay them, why shall we regard our promise not to issue more than $400,000,000, as stipulated for by the act of 1864? If we can reopen the question of the payment of our notes, why may we not reopen the question as to the payment of our bonds? Is the act of 1869 any more sacred than the act of 1875? And if we can reopen these questions, why not reopen the laws requiring the payment of either interest or principal of the public debt? They rest upon acts of Congress which we have the power to repeal. If the public honor cannot protect our promise to the note holder, how shall it protect our promise to the bondholder? Already do we see advocated in high places, by numerous and formidable organizations, all forms of repudiation, which, if adopted, would reduce our nation to the credit of a robber chief—worse than the credit of an Algerine pirate, who at least would not plunder his own countrymen. And if the public creditor had no safety, what chance would the national banks—creations of our own and subject to our will—have in Congress? It has already been proposed to confiscate their bonds, premium and all, as a mode of paying their notes with greenbacks. What expedient so easy if we would make money cheap and abundant? Or, if so extreme a measure could be arrested, what is to prevent the permanent dethronement of gold as a measure of value, and the substitution of an interconvertible currency bond, bearing three and sixty-five hundredths per cent. interest, as a standard of value; and when it become too expensive to print the notes to pay the interest, reduce the rate. Why not? Why pay three and sixty- five hundredths per cent., when it is easier to print three? It is but an act of Congress. And when the process of repudiation goes so far that your notes will not buy bread, why then declare against all interest, and then, after passing through the valley of humiliation, return again to barter, and honor, and gold again.
"Sir, if you once commence this downward course of repudiation then there is but one ending. You may, like Mirabeau and the Girondists, seek to stem the torrent, but you will be swept away by the spirit you have evoked and the instrument you have created. You complain now of a want of confidence which makes men hoard their money. Will you, then, destroy all confidence? No, sir, no; the way to restore confidence is to inspire it by fulfilling your obligations. You cannot make men lend you; you cannot make men sell you anything —either bread, or meat, or wool, or iron, or anything that is or that can be created—except for that which they choose to take. You may depreciate the money which you offer, but it will only take more of it to buy what you want. It is true that the creditor may, by your laws, be compelled to take your money however much you depreciate it, but he cannot buy back that which he sold, or its equivalent in other necessaries of life, and thus he is cheated of part of what he sold. During the war, when money was depreciating, many a simple man gladly counted his gains as he sold his goods or crops at advancing prices, but he found out his mistake when, with his swollen pile, he tried to replace his stock in trade or laid in his supplies. Sir, this policy exhausts itself in cheating the man who buys or sells or loans on credit, who produces something to sell on credit; whether that something be food or clothing; whether it be a necessity or a luxury of life. Productive labor, honest toil, whether of the farmer or the artisan, is deeply interested in credit. It is credit that gives life and competition to trade; and credit is destroyed by every scheme that impairs, delays, or even clouds an obligation.
"Again, sir, an irredeemable and fluctuating currency always raises the rate of interest on money, while a stable currency or an improving currency always reduces the rate of interest. This is easily shown by statistics, but the reason is so obvious that proof is not needed. If a man lends his money he wants it back again with its increase; but if the money, when it is to be paid back, is like to be worth less than when he thinks of loaning it, he will not loan it except at such rates as will cover the risk of depreciation. He will prefer to buy land or something of stable value. If money is at the gold standard, or is advancing toward that standard, he will loan it readily at a moderate interest, for he knows he will receive back money of at least equal value to that he loaned. Again, sir, with a depreciated currency great domestic productions are cut off from the foreign market; for it is impossible that with such a currency we can compete on equal terms with rival nations, whose industry rests upon a specie standard. As we approach such a standard, we are now able, as to a few articles, to compete with foreign industry; but it is only as to articles in the manufacture of which we have peculiar advantages. Let us rest our industries on that standard, and soon we could compete in the markets of the world in all the articles produced from iron, wood, leather, and cotton, the raw basis of which are our national productions. And it must be remembered that all the countries with which we compete are specie-paying countries.
"A country that does not rest her industry upon specie is necessarily excluded from the great manufacturing industries of modern civilization, and is self-condemned to produce only the raw basis for advanced industry. Cheap food, climate, soil, or natural advantages, such as cheap land, vast plains for pasture, or rich mines, may give to a country wealth and prosperity in spite of the evils of depreciated paper money; but when we come in competition with the world in the advanced grades of production which give employment to the skilled mechanic, we must rest such industry upon the gold basis, or we enter the lists like a knight with his armor unbound.
"Again, sir, a depreciated and fluctuating currency is a premium and bounty to the broker and money changer. Under his manipulation our paper standard of value goes up and down, and he gambles and speculates, with all the advantages in his favor. Good people look on and think that it is gold that is going up and down; that their money is a dollar still, and trade and traffic in that belief. But the shrewd speculator calculates daily the depreciation of our note, the shortening of the yard stick, the shrinkage of the acre, the lessening of the ton, and thus it is that he daily adds to his gains from the indifference or delusion of our people.
"Sir, it is an old story, often repeated in our day, and most eloquently epitomized by Daniel Webster in the often-quoted passage of his speech, in which he said:
'A disordered currency is one of the greatest of political evils. It undermines the virtues necessary for the support of the social system and encourages propensities destructive of its happiness. It wars against industry, frugality, and economy; and it fosters the evil spirit of extravagance and speculation. Of all contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deluded them with paper money. Ordinary tyranny, oppression, excessive taxation, these bear lightly upon the happiness of the mass of the community, compared with the fraudulent currencies and the robberies committed by depreciated paper. Our own history has recorded for our instruction enough, and more than enough, of the demoralizing tendency, the injustice, and the intolerable oppression of the virtuous and well-disposed, of a degraded paper currency authorized by law or in any way countenanced by government.'
"Sir, we must meet this question of specie payments, not only because the public honor is pledged to do so, but also for the lesser reason that it is our interest to do so. The only questions we should permit ourselves to discuss are the means and measures of doing so.