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.