A Speech on the Principles of Finance

by Victoria C. Woodhull

Wealth is whatever is produced by labor which adds to the comforts, the happiness or the life of man; and everything that does this, either directly or indirectly, has intrinsic value—that is, has the capacity to bless mankind.

Wealth may, and should, be divided into two kinds, namely, permanent wealth and transitory wealth.

Permanent wealth consists of all those products of labor which are not themselves transferable into life, comfort or happiness, but which may at all times be exchanged for that which is thus transferable into that which can be used to continue life. Gold, silver and precious stones are among the best illustrations there are of permanent wealth.

Transitory wealth consists of all those products of labor of which direct use is made to maintain life or to add to its comforts and happiness, and which, by such process, are absorbed into and become a part of the life of humanity. Transitory wealth, it will be seen, is much the more important of the two, since, if people only possessed permanent wealth, their life could not be continued an hour by it, unless there were a possibility of exchanging it for the necessities of life.

It would seem that all kinds of wealth are intrinsically valuable, since its various kinds may be either directly used to maintain life or may be exchanged for those which will maintain life. Wealth and intrinsic value, then, mean the same thing.

But what does the term money mean: or has it no necessary significance in the inquiry?

There was a time when there was no such thing or word as money; but at that time there was life to continue, for which wealth was necessary. It seems that wealth had existence before money was thought of. Wealth is substance, of which money is the principle or representative, but which, in itself, has no intrinsic value.

Money is an invention made to represent wealth, or value, in order that its various kinds may be exchanged with facility, or that they may be exchanged without the absolute and direct and immediate receipt and delivery of one product of labor for another product of labor. All the products of labor may be exchanged directly, and without the use of any representative or go-between, which for the time being stands representative of the one or the other, but not so well at all times and under all circumstances. Money is anything which stands representative of any product of labor; that is, that can be made use of to facilitate the exchange of any of the results of labor, which are wealth. A representative of anything cannot be the thing itself, therefore, if money is a representative of wealth it is not itself wealth. Were A, B and C to at all times exchange their products between themselves by direct transfer, they would have no use for money; they would exchange—deliver and receive—actual values. But when A desires from B some of his products, himself not having on hand any of his products which B desires, he receives from B his value and gives him his representative of value—his note—promising that at a future time he will deliver B the actual value which he desires.

Currency is only a form of money, the same as gold is only a form of wealth; and in the same manner that gold is wealth, is currency money. Money being the principle of representation in exchange, everything of which use is made to facilitate exchange in the form of representative value is money. Anything which can be transferred from one party to another, anything that is negotiable which is not actual value of itself, is money. This includes not only all currency, bank notes, but also bills of exchange, the ledger and bonds. These are all representatives of wealth, all demands for payment at a future time of a certain specified sum, and consequently are money. It is quite evident that, with the terms wealth and money, we have all the necessary distinctions which should enter into the abstract question of finance. All other terms are but names for separate kinds or forms of these terms, to be made use of when they respectively arise in making exchanges.

Now, every one must at once concede that that which best represents all of the products of labor will also best exchange them, and is therefore the best money. It is equally clear that gold in no way represents any labor but that which produces it. If gold were a true representative of the results of all other labor, except that which produces it, would it not also be apparent that such labor must be equal to all other labor. Were gold a thousand times more valuable than it is held to be, it would not even then be able to represent all other values. Therefore, gold is a false standard of value, a false representative of wealth.