To avoid these disasters, it is proposed to issue a national currency that is constant, and that is therefore a standard measure of value,—an instrumentality that commerce has never yet been furnished with, though it is the only one capable of affording to the industry of the country proper, that is, invariable, encouragement. Not being empirical, it will make no pretence of furnishing the precious metals at less than the market-rate, either for exportation or hoarding; but it will have the effect of reducing them to their true position, that of merchandise, so that they may be exchanged for the products of other countries with profit. For the same reason it will not be redeemable. To redeem a currency is to replace it by another. What other? Specie? That is out of the question. However desirable specie may be as wealth, as a currency, except for change, it is a nuisance. Accordingly, merchants prefer a representative currency, even though its representative character be somewhat problematical. And government failing to supply a better, this becomes the currency of the country by a species of necessity. In short, because of its inconveniences and risks, specie is not used as a currency, and will not be, because, in addition to these obstacles, the representative currency in use, being without proper regulation, has increased to such an extent that there is not sufficient coin to replace it,—a fact that practically settles in the negative the question of the sufficiency of the precious metals for currency, in addition to their other use, in a country where civilization has established credit as a means of trade. Nevertheless, a specie-currency is advocated even by those who carefully avoid handling it, and who would be the last to consent to such a reduction of the currency as its exclusive use would require,—a confusion of mind due to the fact that the difference between value and wealth is not always distinctly recognized. Moreover, it is not the function of a currency to be replaced, but to be a means of payment. This the proposed currency will be by right of use,—a right inherent in a national currency, and respected as long as the government respects itself, that is, as long as the people govern wisely.
A dollar, value-currency, will always buy a dollar's worth of gold, but it may not always buy the quantity of gold contained in the gold dollar. How much it will buy depends on the quantitative relation of the currency to the population,—a relation which, though entirely optional, should never be changed, because, with whatever change, provided the proper relation of the parts to the whole be preserved, with little there will be no lack, and with much, there will be nothing over,—and because any change of that relation is injurious to commerce, inasmuch as it produces a corresponding change in the value of credits. And assuming a change to have been made, a return to the former rate, instead of being a mitigation, will be a repetition of the injury, except in regard to credits so extended that they embrace both changes. If, however, a reduction be insisted on, a suitable mode may be proposed. Twenty dollars per head gives six hundred millions. Assuming this quantity to be superabundant, if it be adhered to until the population reaches forty millions, the rate will be fifteen dollars per head, which may be assumed to be abundant. If it be adhered to until the population reaches sixty millions, which it will probably do in one generation, the rate will be ten dollars per head, which may be assumed to be convenient; and any attained rate may be continued, or made constant, by increasing the currency proportionately with the increase of the population. This mode of reduction, however, is possible with a national value-currency only. A specie-currency is incapable of regulation. The same may be said of any currency based on specie. Indeed, a credit-currency will necessarily collapse under a superabundant issue, unless its promises be ignored, or unless it be sustained at the expense of the nation,—an expense which the nation itself cannot sustain permanently.
The rate of the currency governs the value of wealth. It is important, therefore, that government have time to pay its debts before any great decrease of currency takes place; otherwise, that decrease will be equivalent to an increase of taxes, without producing a corresponding decrease of the public debt. For the portion payable in gold it will be better economy to pay the premium than to reduce the currency sufficiently to avoid it; because such a reduction will work a corresponding reduction of the value of all the wealth of the country, a sum much greater than the debt. It is scarcely necessary to suggest that the more currency the less taxes, and the greater the ability to pay them; or that, when the war is over, government will cease to spend several hundred millions per annum, and the industry this money supports will require time to rearrange and adapt itself to pacific demands; or that, if the currency be suddenly and largely reduced at such a time, an accumulation of distress will follow, such as is rarely seen. With the proposed currency, however, and the proposed mode of reduction, if a reduction be agreed on, the change from the condition of war to that of peace may take place without producing the prostration of business so justly anticipated, because so fully warranted by experience of a credit-currency, and so earnestly to be deprecated, because so evidently and so easily avoidable by the adoption of a national currency that is capable of regulation, and that, being properly regulated, cannot fail.
Though this currency, like that of bank-notes, is wholly nominal, the words of which it consists are those of a nation, and represent power. Accordingly, they give to the currency power to perform its allotted function; but they give it no other power. Has any other currency any other power? A specie-currency may be converted into ear-rings, but it is no longer a currency; it may be buried in iron pots, or locked in iron safes, but it is not then a currency; it may be exported to foreign lands, but it is not there a currency until reauthorized. Currencies, properly speaking, are ideas clothed in words,—the words of a nation, otherwise called laws. The merchandise attached to a specie-currency is an evidence of former barbarism,—a remain of the primitive practice of barter,—an incongruous element, tending to impede rather than to assist circulation, to destroy rather than to create a currency.
But is a value-currency possible? It is, to a people enjoying universal equality before the law, and knowing that every individual has a direct and immediate interest in it,—knowing that it is a part of the business-policy of each. And it is only such a people that will dare to inaugurate, and persevere to sustain it. Nevertheless, as it cannot but appear problematical to minds that have not given to the subject the most earnest attention, its adoption will doubtless be most strenuously opposed, by habits of thought, by modes of action, and by interests, as ancient, as universal, and apparently as fixed as the race itself. Yet, as M. Arago justly remarks in one of his biographies addressed to the French Academy,—"The moral transformations of society are subject to the laws of continuity; they rise and grow, like the productions of the earth, by imperceptible gradations. Each century develops, discusses, and adapts to itself, in some degree, truths—or, if you prefer it, principles—of which the conception belonged to the preceding century; this work of the mind usually goes on without being perceived by the vulgar; but when the day of application arrives, when principles claim their part in practice, when they aim at penetrating into political life, the ancient interests, if they have only this same antiquity to invoke in their favor, become excited, resist, and struggle, and society is shaken to its foundations. The tableau will be complete, Gentlemen, when I add, that, in these obstinate conflicts, it is never the principles that succumb."
IN MEMORY OF
J. W.—R. W.
No mystic charm, no mortal art
Can bid our loved companions stay;
The bands that clasp them to our heart
Snap in death's frost and fall apart;
Like shadows fading with the day,
They pass away.