It may be objected to by some that speculation leads to national development; that in many of the wild railroad, emigration, city and other schemes, that have been projected and carried through under its stimulus, the welfare of the country has been subserved. To this ingenious objection it may be answered that, under a sound financial system, these enterprises would have been undertaken everywhere when the demands of the country warranted them, and because there was a demand for them, instead of for the pure purposes of individual or corporate speculation. One of the best results that would flow from this change of incentive would be, that no “Bubbles” could be palmed off on the unwary by “flash” advertising, which would burst at some future time, to the destruction of some deluded victims of unscrupulous financiers.
It is one of the most fatal of commercial errors to suppose that large general prices are an evidence of prosperity. On the contrary, it is true that when the prices affixed to any kind of property are larger than its real capacity for production, it is an expansion which must at some time collapse, to the detriment of the holder. Thus, whenever property is valued at such a price that it cannot be used to pay a certain per cent. income, its value is expanded, and though this expansion may continue under the pressure of a so-called prosperity, and become general, even country-wide, if the general productive capacity of the country cannot sustain this increased value, collapse must as surely come as results follow causes. Even in this demonstration it is conclusively shown that the productive capacity of the country is the real measure of value, and that, finally, no matter how irrelevant the process of wealth and prices may have been to it, it is the power which ultimately measures all values.
This appears to us such a plain proposition that it seems almost superfluous to present further arguments to prove the desirability of at once proceeding to make the productive capacity of the country the basis of value upon which to issue a currency to meet the legitimate demands of the people for the purposes of exchange. The attention of all who realize the unstableness of our present system, and the desirableness of providing against the tremendous fluctuations it is capable of, is called to the necessity of uniting to bring this matter prominently before the next Congress, with the view of having it thus brought prominently before the country, and of having it thoroughly analyzed and understood. When analyzed and comprehended, the idea of a gold basis will forever depart from all progressive minds, and the impetus the new money system will thereby receive will never be checked until its science is developed into general national practice.
New York, Oct. 27, 1870.
PAPERS ON FINANCE AND COMMERCE.
NO. XI.
In our last, the necessity of urging the consideration of the finance question upon Congress, with the view of having the whole range of the matter brought prominently before the country, was proposed. Of all practical questions that require immediate solution, none is of so much importance to man as this; and none more so to woman unless that of equality for herself is. No country can enjoy a series of years of uninterrupted commercial prosperity when that country has a circulating medium which can be affected by the manipulations of shrewd financiers for their own ends. And no financial policy is more ruinous to the true interests of a whole country than that of a constantly changing commercial valuation upon either personal or real estate, excepting alone in the latter, when it becomes the location of more capacity for actual production.
Real estate, abstractly considered, has no appreciable value. It only becomes relatively valuable when labor can make use of it to produce something valuable from it or by it. Absolutely there can be no individual title to any part of the soil of any country. Taken as a whole, the land comprised within the limits of the authority of any government can be made such use of as such government may determine, but as to actual conveyance of absolute individual ownership, that is impossible, because none of the powers involved in the attempt at conveyance could have had any part in the production of said land, and, therefore, could have no right or authority to transfer it, from the fact of an entire lack of title to transfer.
It may be objected that these are merely technical assumptions which the customs of society have never admitted. So, too, may it be objected to all encroachments of scientific principles upon old forms and customs. Nevertheless, science continues to analyze and demonstrate, and the world continues to come more and more under its guidance every year. In the principles of government science has not, until very recently, found grounds of attack. Since it has come to be recognized that there really is a science of society, and consequently that all its structure can be analyzed, understood and guided by its deductions many of the customs and practices that have so long controlled the people are found to be entirely without the support of principles fundamentally necessary to assure a permanently constructive form of society.
Wherever maxims of temporary policy are the guiding rules, there will ever be alternate construction and destruction; but wherever scientific, demonstrable principles are the governing power, there will be found permanency. That “money” is susceptible of analysis, and of being predicated upon a scientific basis is no longer to be questioned. It is a branch of the science of society, and as such must receive consideration as the science itself becomes disseminated among the peoples. It was not many years ago that “the sciences” were unknown in our common schools. It will not be many years hence until the science of society will be a recognized branch of every child’s education in the most enlightened portions of the world. Political economy, which is a branch of social science, is regarded with favor by many now, and, comprehensively speaking, all these questions which have been looked upon as “too abstract” for common comprehension, are found to be the real principles which underlie all social strictures.