A Speech on the Principles of Finance

by Victoria C. Woodhull

But it is one of the most difficult of things for the people to divorce their minds from the idea that gold is the only possible, real money. Yet the facts attaching to the greenback stand out in bold and indisputable relief, perfectly and entirely dispelling all basis for the idea. Because the greenback was the first step toward a real money that the country ever took, which left gold entirely out of the question, the impression still remains with the people that a return must be made to a gold basis; never stopping to observe how vastly superior the wealth basis is to what the gold basis would be.

Bank note currency, or a currency issued by an individual or by a class of individuals, always carries along with itself the idea and need of redeemability. If, however, there is any thought among the people that the utterers cannot meet their promises of redemption, at that very time when, of all others, confidence is necessary to avoid ruin, they rush to prove the suspected incapacity; and generally they do prove it.

The idea of, and necessity for, redeemability, is that which most requires to be divorced from money. Money—real money—should never require to be redeemed. It should always be just as valuable to retain possession of as anything could be into which it may be converted. Anything that requires to be redeemed in order to make it permanently valuable or a representative of value is utterly unworthy the name of money, because it does not truly represent real wealth. It is that currency of which there is doubt about the real wealth it pretends to represent which requires to be made redeemable before it will circulate; and this fact proves most conclusively that it is not money in any true sense of that term: that is to say, it is not that which requires to be converted into substance.

It is readily perceivable that a national currency having continually all the nation’s wealth, accumulated and prospective, as its basis, never needs to be redeemed. This single consideration is of quite sufficient importance to alone warrant its immediate adoption and use upon the standard of wealth. The gold standard is the flimsiest deception of which it is possible to imagine. The people’s talk of approaching a gold standard as the ultimate of appreciation is the merest jeu d’esprit. Gold is now selling at say 113. Suppose that during the next year its price should gradually decline to par, or, in the phraseology of the goldites, their country’s general credit should appreciate to par, would the process of appreciation necessarily stop just at that point? Why should it not just as reasonably continue to appreciate, so that in another year gold would be below the par of the country’s credit? This simple analysis proves beyond all cavil the arbitrariness of the gold standard of value.

The credit of a country increases or diminishes without any regard whatever to its gold producing or paying capacity. It is governed by its capacity for the general production of all kinds of wealth over and above its average consumption. It is just the same with a country as it is with an individual; the individual, to become wealthy and to have a good credit, must not necessarily ever have any gold; but he must be able to produce or acquire more than he consumes by his general expenses. A country must proceed by the same process to become wealthy, and it is simply an absurdity for people to talk of the prosperity of the country when high prices for everything are induced and fostered by a system which restricts general production in order that special production may flourish. Individuals cannot get rich by trading among themselves, no matter if they increase the price of their wares ten per cent. every year. Neither can all the individuals of a country do the same thing. What is required by both is increase in the quantity of what they trade in.

It is not the price of what a people have that constitutes their true wealth, but it is the quantity of their commodities. A barrel of flour is possessed of no more real value if it cost twenty dollars instead of five. It will not maintain life a day longer, let the price even be a thousand dollars. Thus we arrive at the real basis of values—the real wealth—and I have introduced this, precisely for the purpose of showing the high-priced protectionists that they know nothing about true values or true economy, as well as to also show that there is no real wealth except that which conduces to higher ends than its simple acquisition. Wealth as an end is despotism. Wealth as a means is humanitarianism.

But to return from this departure to the main subject. For the idea of redeemability for money there should be substituted that of convertibility. A real money should at all times be capable of being converted into that of which it stands representative. And here we arrive at the last analysis of a real money. It will be readily seen how completely a national currency meets this requirement. It would be representative of the productive capacity of the country, and could always be converted into whatever portion or kind of its products might be required; or into the products of other countries which may be acquired by the direct exchange of our own products.

What more than this can be demanded of money; or what better thing invented as money; or what more capable of inspiring and maintaining an even and legitimate confidence?

National currency being the very best possible money, because it is not only the most convenient but also the most secure, there remains nothing to be done but to continue to so acquaint the people, until they become convinced of the rapaciousness of those systems by which the large majority are compelled to labor all their lives for the very select few. There is no difficulty in arriving at all the initial points necessary to determine the amount required, how it should be distributed and kept in circulation, or how its circulation should be regulated. These are all practicalities of finance.

But there is one thing which has never yet received consideration, which is absolutely necessary to make money meet all the requirements of money, and at the same time to maintain a fixed and absolute value at all times and under all circumstances, which money never has had. From its lacking, have come all the various financial convulsions. And this is, an absolute measure of value.