A Speech on the Principles of Finance

by Victoria C. Woodhull

So far as this condition is confined to individuals who had no other reason for receiving them, and no other assurance of their real value than the supposed capacity and intention of the uttering person or persons, it is strictly a legitimate condition; and one with which the sufferers can find no fault; since of their own free will and choice they received the utterers assurances that his representatives were of real value. An individual upon his personal judgment, without undue persuasion, accepts another’s representative; if it prove bad he has himself only to blame for the loss, as coming from an error of judgment; and no power or authority has any right to step in to compel the making of amends for this error. This is the simple doctrine of the rights of individuals, with which no third party has any right to interfere after the occurrence of the fact. But when banks are organized under certain formula of law, framed by the people or their representatives through government, the people receive and pay out their issues—representatives of their value—not because they have special confidence in the capacity and intention of the individuals who compose the management, but because they suppose the management has conformed to those certain forms of law which are intended to render them safe. In this way the government, at least indirectly, gives credit to the bank, and currency to its issues, and the people accept them simply because the government has done so.

But if these banks are mismanaged either ignorantly or intentionally, or managed by designing men, as often they are, who make use of the governmental sanction to swindle the people, as many times they have, where can the people look for redress; where should they look for redress? The government is justly responsible to the people for all such issues, since it did not require real security from the banks, and government should make reparation therefor.

This is precisely our objection to any and all forms of bank issues. There can be no arrangement made so perfect in security to her people as to guarantee them absolutely against all hazard, that will permit the banks to make the profits which they seem to think they are entitled to make from the people. In absolute security there can be no profit. Bank profits demand the circulation of more notes than they have real value to represent. Profits come only from speculating either upon the confidence or the money of the people, and government has no right to protect such illegitimate and unjust practices.

Our present system of banking is a swindle upon the people, which it is simply surprising that they endure as they have and do. For the banks to be permitted to filch from the people twenty-four million dollars per annum is an outrageous villainy which, if comprehended by the people in its true light, could not exist another year. ’Tis true these banks complied with the law passed in a time of dire necessity, and that through them the government acquired the means to conduct the war. But did not the people themselves do even more than furnish money, which was promised to be returned; did they not freely give their lives, which can never be returned, and which the government never thought of promising to either return or guarantee, and that, too, for the pitiful sum of thirteen dollars per month? What comparison is there between the sacrifices made by the two classes of people, the capitalists who have absorbed the wealth of the country and the laborers who still continue to give life, property and vitality to the country. There is absolutely no chance for a comparison; the distinction is too great.

It seems to me that if either class is entitled to superior consideration—to receive millions of the people’s money—it is the common people who so freely offered their lives to save their country, instead of those who simply loaned their money at enormous rates of interest, with the certain knowledge that it would be repaid. The present claims are too preposterous, and deceptive, and too unjust to be long continued.

All bank notes in their ultimate effects are frauds upon the people, and their continuation as a circulating medium is only possible because that part of the people who suffer from them have not yet risen into a proper understanding of the question. The time is, however, near at hand when those who have reveled in the result, of the wear and tear of the muscle, and the sweat of the brow, of the common laborer, will be compelled to produce honestly and equitably everything they would enjoy.

The substitute for all kinds of bank notes as the money for the people should be a purely people’s money—a national currency whose basis of value would be the accumulated wealth of the country, and also its capacity for regularly increasing such wealth. Is there any reliance to be placed in a currency issued by an individual or a number of individuals through an incorporated bank, based upon his or their wealth, which is at all times liable to pass into the hands of other individuals? Yes, there is a presumptive reliance—an indefinite security—but the security is not perfect. In comparison with this security place that of a currency issued by the government, based upon the entire wealth of the whole country, which, no matter how much it might be changed about among the different persons comprising the nation by various contingencies, could never depart from the country; which fact would render it safe under any and all contingencies that could possibly arise, excepting alone the entire destruction of the country and its government by a foreign power; which contingency is not sufficiently imminent to cause any present alarm.

A national currency thus based would have not only all the gold of the country as a basis, but also all other kinds of wealth. Is it not perfectly plain that such a money would be just so much better than common bank notes, with a one-third gold basis, as the total amount of the wealth of the country is greater than such amount of gold? It would be in the most complete sense the people’s money. It would be a system of mutual banking wherein every individual of the country would have an interest, instead of there being a vast number of mutual banking institutions, such as has been proposed by a person of profound financial ideas.

As before stated, my objection to all systems of individual banking is that the basis of their issues is at all times liable to pass from the possession of such individuals; whereas, in a national currency—the money of the people, themselves in the aggregate the basis and security—there could be no such liability; since, if parts of the security pass from original to secondary hands, it is still the basis of the currency, and could never be transferred beyond the jurisdiction of security by the operations of designing or incapable persons. By no possibility could there ever a loss occur to the holder of such a currency, except it be destroyed in his hands.

Undoubtedly the greenback was the nearest approach to a real money that any people of the earth ever made. We have only to observe how admirably it has answered nearly all the purposes for which people require money, to be convinced that it has the very best—the most secure—basis that it is possible for a money to have. It stands representative of the capacity and willingness of the government—the representative of all the people—to pay.