Belford's Magazine, Vol 2, December 1888

by Various

"How little those people know of their own business!" said Salmon P. Chase to Mr. Richard B. Pullen, of Cincinnati, after a meeting of bankers the able Secretary of the Treasury had called for consultation. It was well for the bankers that such was and is their condition. They are practical men—that is, men who accept the fact as they see it, without bothering their brains as to the reason for it. The business man who sends an order through the telegraph or telephone does not stop to consider what strange agency he is using. If he did, he would not only have his mind taken from his avocation, but lose the chance of a deal in the market. The mind given to and capable of study is one given to dreaming, not acting.

The vast debt owing the people by the government in the shape of currency presented to Secretary McCulloch his first problem that had to be solved before credit could be restored and business again put on a sound, healthy basis. He had the advantage of knowing clearly and precisely the work before him. It was the error of the day, as it is the error now, to confound currency with money. By money is meant the great measure of value in gold and silver coin determined on by trade and accepted the world over since trade first began. Currency, on the contrary, is that form of credit used in paper to facilitate exchange. Now, trade calls for a certain amount of this, not so large as is popularly supposed, but fluctuating in quantity as trade makes its demand. Gold and silver cannot be relied on for this purpose, for their intrinsic value, which makes them a measure of value, forbids. This measure of value, like that of the yard as to length, and the pound as to weight, becomes an abstract idea. When one seeks to purchase a pair of shoes, and the shoemaker says that their, price is five dollars, one may pay for them five bushels of wheat; so that on both sides a value is got at that facilitates the exchange. If currency is used, it, too, has the same nature—with this fact added: the intrinsic value of the paper promise to pay coin lies in the credit of the man, corporation, or government issuing the promise.

"If a man fall down a steep place," said the Hon. Tom Benton, "and get killed with a gold dollar in his pocket, and his bones be found a hundred years after, they will be worth the dollar. If, however, he has a promise to pay a dollar, he has that which depends for value on a board of directors sitting around a mahogany table. It may be worth a dollar and it may be worthless."

This disposes of the fiat money. We cannot create something out of nothing by act of Congress. When the government issues its paper, it coins its credit into currency. Its value, if it has any, lies in that.

Now, when Secretary McCulloch took command of the Treasury Department the credit of the government was at a heavy discount, and getting less every hour. The only class at the North that doubted the ability of the government to maintain itself in the War of Secession was the moneyed class, and this class continued to decry the credit of the government long after the war had been brought to a successful conclusion. This, because the condition of discredit was a source of income. They who had refused to fetch out their money-bags to aid the government when the roar of the first artillery was throbbing along the halls of the Capitol, now sought to fatten on its distress.

Hugh McCulloch found the government financially aground like a stranded whale, with sharks eating in at one end, and vultures and wolves at the other.

And yet all the vast powers of the government are given to the aid and support of this class from which come the sharks, buzzards, and wolves.

The new Secretary had this class to contend with; and he had another in the form of politicians, the representatives of the people that represented everything but the people's patriotism. Mr. McCulloch knew that to restore credit and redeem our currency the volume must be contracted. The moneyed class wanted to be let alone—it always wants that. The politicians wanted more currency—or money, as they called it.

In addition to this trouble, the politicians of the dominant party sought to make a colony of the entire South, to be governed by carpet-baggers and bayonets, because Southern staples could thus be made to contribute to Northern capital, and the ignorant plantation negroes could be used to keep that party in power. In this way half our territory and the most valuable of our products were paralyzed.

Fortunately for the country, President Johnson got into a row with both capitalists and politicians. As a poor white of the South, he hated wealth; as a Southerner, he hated Northern politicians. An ignorant, vicious sort of a man, Johnson was obstinate and courageous. It was, however, a sort of moral courage—if we may use such a term in this connection. Probably his nerve had been demoralized by his intemperate habits. It is true that the man who in the Senate defied the fierce slave-holders was the man whom General Don Carlos Buell cowed at Cincinnati, and who ordered the unfortunate and innocent Mrs Surratt to be hanged within twenty-four hours, with the recommendation to mercy of the court that condemned her before him, and the shrieks of her agonized daughter ringing in his ears.