Money is power; a scientific, historic and practical treatise on the subject of finance

Front matter

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BOUGHT WITH THE INCOME OF THE

SAGE ENDOWMENT FUND

Author's Preface

When the author commenced the investigation of the subject of Money he did it simply for information. During the progress of his researches, extensive notes were made, and when he had got through he found ample materials had been collected for a book ; and believing the statistical facts arid monetary history collected would be useful and interesting to the public, he arranged them in systematic form and submits them, together with the results of his reflections, to the candid reader. Finding that discussions of the subject had often been contracted in view, and superficial in character, the author, to avoid those defects, constantly endeavored to gather within the range of his inquiries all the forces which affect the material interests of a people ; find out the prime causes of national prosperity and adversity ; discover the true nature, laws, and functions of money, and assign to the latter its true powers, in an economic point of view, as a force contributing to the development and proper application of man's mental and physical powers. Such a course has resulted in bringing him in conflict with many writers who have preceded him.

The nature of the work inade it necessary for him

'S' AUTHOR S PREFACE.

to review and criticise the theories of those who differ Avith him — a dut}- he fain M'ould have avoided, but one which he endeavored to discharge in a candid arid courteous manner.

At the conclusion is a monetary system deduced from fundamental truths which have been established and are sustained by taonetary commercial, and industrial history through a long course of years.

The work was prepared for the perusal of all classes, and is, therefore, as plain and simple in language ajid style as the author could malvo it in the time he was engaged on it. Whatever repetition may lie discovered, was purposely inserted to keep constanth^ before the mind of the casual reader certain important truths.

NotMnthstanding the differences in theory which may exist l^etween the author and reader, yet the historic and statistical portions of the work cannot fail to interest the latter, because they are authentic — oeing collected from the most reliable sources.

If the work should result in throwing any light upon the subject treated, which is now being discussed from Maine to California, and from the Lakes to the Gulf of Mexico, the author will be satisfied, and consider himself compensated for his labors.

Montgomery City, Mo.,

March 1st, 1878.

Table Of Contents

Prefatory— Chapter First. — Review of Authors 5

Aristotle, 6. England in 1696; John Locke; Re-colnage, 7. Lord Macauley, 8. John Law his Truths and Errors, 9. David Hume, 10. Adam Smith, 11. Dugald Stewart : Parliamentary Committee. 12. Their Errors, 13. Lord King, 15. Mr. Huskisson, 16. David Ricardo . 18. I^ovd Liverpool ; Scotch Banks, 48. Thomas Tooke ; Mr. Wilson, 19. J. B. McCuUoch, 20. John Stuari Mill. 21. H. D. Macleod,.22. Henry Tawcett; Continental Money, 23. W.Stanley Jevons,24. Francis Wayland; Francis Bowen,25. His Errors, 26. Wra. G. Sumner; A. K Peery; Cavy Baird; B. A. Hill, 27. Henry V. Poor, 2S.

PREFATORY— Chapter Second — Criticisms on Current Thieories.. 33 Ultra Greeubackers, 3;<. The U. S. as a Money Broker, ST. Interconvertible Bonds, 38. Interest. 39. Nothing but Legal Tenders. 40. The Golden ralf, 41. National Banks. 44. Patches,47. Commune,48.

Chapter I. — Money: its Powers and Functions 51

Measure ; Nominal ; Ideal, 51. Mental Process ; The African Macute ; ■swaps ; Estimating and Expressing Values, 52. Plenty of Measures Necessary ; A Medium of Exchanges, 53. Plenty, easy to get ; Scarce, hard to get ; Important Power ; Without Money, Man Keduced to What, 54 Illustration; Business Blocked. 55. Industries Euined ; Money Combines and Applies .vran's Powers, 56. Amount Needed Depends on Civilization; Limit to Right Use of Money; Every Brain and Hand Pi-oflcably Employed; Prorjlem,57. Rule for Money and its Increase; Exception, 59 Over-issue; Money Imparts Money Values ; A Thing ; Relative Value ; Its Power Affected by Conditions, 60. niusti-ated ; Napoleonic Wars .61. Effects of Plenty ; Effects of InsufBciency; Over-production, 62. Declining Volume, 63. Rome; Augustus; Justinian; The Dark Ages; Isrrel; Persia; Greece; Europe; America. 64. Circulation its Proper Use: What Constitutes a Thing Money; Gold and Silver. 65. Need not have Commodity Value ; Indian Wampum, 66. Bank Paper ; Money is What, (i7. May consist of Anything; Intrinsic Value ; Articles of Confederation, 68. No Power to make Money; Constitutional Powers of Congress, 69. Different Opinions; Supreme Court Decision, 70.

VI TABLE OF CONTENTS.

Act of 1793 ; Copper ; Strict Construction ; -'Coin," "Money," and"To Coin;" Their Meaning, 71. To Make, Fabricate, Invent, Stamp any Material; Objection to Legal Tenders Answered, 73.

Chapter II.— Standard of Values ' 74

Two Theories, 74. (iold and Silver not Uniform; Evils Resulting, 75. Illustrated by Imports, 76. Value ; Commercial Relation, 77. Their Values Change; Fluctuations since 1513, 78. Silver Declined Only, How ; Fall of Lands, 79. Value of Metals not Absolute, 80. Controlled by Demand and Supply; Demand Increased, Value Increases, 81. H. V. Poor, 82. Universal Law of Values; Ballionists Essay to Avoid it, 8 {. Gold Hunting in California ; Its Cost, 84. Bullion Theory; Absurdity of it; Illustrated, 86. Addition to Stock of Gold from 1850 to 1855 ; Increased Use in Arts ; Decline of Supply ; Cause of its Rise; Never can be an Unvarying Standard, 88. Paper Money not Symbolic; Amount in 1860; Values of 1860; Money an Absolute Power; Money and Property Opposing Forces, 89. Symbolic Cui'rency; Error Illustrated; Any Quantity of Money wil be Used, 90. Checks, Drafts, Bills, etc.. Not Symbolic, 91. Xorainal and Exchange Value of Money Different; Quantity of Money Bears a Relation to Value of Property. 92. How Value Attaches to a Thing; How Paper Becomes Equal to Gold in Value; Bits of Paper in the U. S. and Gold in ISngland, 93. Money .\cting oa Property produces Prices. 96. Equilibrium of Values and a Standard Impossible, 97. Inflation of Redeemable Paper and Legal Tenders ; Effects, 97. Cause of Panics and Crises; Legal Tenders Prevent them, 99. Illustrated; Rules of Differences of Values of Money, 100. Banks of Issue Compelled to Violate the Primary Laws of the Supply of Money; Evds of the System, 103. Benefit of Legal Tenders, 104.

Chapter III. — Causes of the Rise and Fali of Prices of Property and Gold Premium 107

Kinds of Money ; Table of Paper from 1851 to 1877, i07. How the Expansion and Contraction was Ififfected ; Seeming Paradox, 103. Immediate and Remote Effects of Large and Small Volume of Money on Prices and Production, 108. Table of Value of Gold from 1862 to 1876, 110. Tables of Prices, 111. Rise and Fall of Prices not in Ratio to Amount of Money, 113. Critical Analysis of Causes Each year, 114. Tables of Exports and Imports of Merchandise and Ciold an»l Silver, 115. M. Victor Bonnet on French Finance 118. Mr. Huskison in British Parliament, 119. Prices Affected by Paper as w^l as Coin, 1-20. Increase of Paper adds to the World's Stock of .Money; Raises Values and Reduces Gold Value; Examples— England, France, Germany, -Vustria, U. S., 121 Rule of Coin Premium and Prices, 12:5. Debtor Nation Ought to Have Paper; Resumption Delusion; Mr. Rloardo, 124. Great Decline must result, 125. One fouth of the Commercial Values will be Destroyed by Resumption, 126.

Chapter IV. — Par ; its Laws 127

What Produces it, 127. Evil when Forced; Resumption Intensifies Demand lor Coin, 128. Result of Forcing a Par of Values ; What Pn and Premium indicate, 1211. Effects of Depreciated Currency

TABLE or CONTENTS. VU

on Coniineree. 130. Par not the Goal; ___iiej- to do tUe Vast Business is the Thing; Amount of Business Done, 131. Probable Eifects of Eemonetizing Silver, 133. Will not Save the Oounti-y from Evils of Forced Par by liesumption, 133.

Chapter V.— Gold, Silver and Paper Money in the World 135

Civilization ; Increase of Commerce ; Gold Products Since 1492. 135. Table of Products, Consumption, etc., from 1840 to 1874; Products of Silver from 1492 to 1876; Amount Consumed in Arts. 136. Fawcett's Table of Gold and Silver in Europe ; Criticism 138. Table of Gold and Silver in the World. 140. Method of Estimation, 141. Table of per capita Supply of Money in the Pour Quarters of the Globe, 142. Table of Paper Money in the World and Where Distributed; Tables of Commerce of Great Britain, Prance and U. S,, 143. N. Y. Clearings from 1854 to 1877; London Clearings from 1868 to 1874; Increase; Present Decline; Rome; Venide, 145. Table of Gold and Silver Products from 1853 to 1876; That Shipped to Asia never returns, 147 Decline in Supply; Decline in Stock; Paper Declined; Depression; Governments must Increase the Paper or suflfer Decline, 148.

Chapter VI —Bonds of the Civilized World 14H

Conditions and Accidents which Caused the Indebtedness. 149. Table of National Debts, 151. Increase since 187S; Municipal, Slate and Eailroad Debts, 162. jFive Times the World's .Money, 153. Become Oppressive, 154. Bitter.Contest, 155.

Chapter VII.— The Money Power 156

Owns Bonded Indebtedness of the World, 156. Its Character; Its Policy; Its Vast Power and Influence, 1.57. Enemy of Industries; Inimical to Civilization, 159. Conflict,.160.

Chapter VIII. — Gold and Silver ProducJ; in the United States. . .l(jl Secretary -ol the Treasury, 161, Mint Director's Estimate; How he gets it; Ert-ors ; Amount used in Arts, 163. Deposits at the Mints, 163. -Raymond's Estimate of Gold; Monetary Commission's Estimate of Silver, 164, Pawcett's Tables; Finance Report, 165. (Join in Banks ; Coin Certificates, 166. Table of Exports and Imports of Merchandise, Gold and Silver, 167. Debt Owed Abroad and Interest, 168. Tableof Gold and Silver; Decline in 1877; Amount Brought in by Immigration, 169. Foreign Balances not to be Counted on; Table of Customs; Dec'ine; Immigrants Decreasing, 171. Problem for the Country, 172.