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INDUSTRIAL CRISEa 
 
 TIlElll CAUSES AND REMIiDlES. 
 
 By 11. BOW LB Y WILLSON, 
 
 NIG^V YORK. 
 
 (FROM THE REPORT OP THE CONGRESSlONAli COMMITTEE 
 ON DEPRESSION IN LABOR AND BUSINESS.) 
 
 18 7 9. 
 
 WASHINGTON; 
 
 OOYBBNMENT PRINTIifa OPPICB. 
 
 1879. 
 
 m 
 
 ft-^/ 
 
 - ■^I-A ■■ . ., ^ _ _,^-.'- 
 
INDUSTllIAl. CRISES. 
 
 THEIU CAL'SKS AND RKMEDIRS. 
 
 HV 11. UoWLHY WiLI.SOX. 
 
 49 WkST FoKTY-KUiUTH SrUKKT, 
 
 New York, Stjttiimbir 16, Ih7H. 
 
 '"iKNTi.KMKN : I iivnil my.silf of ydiir kiiul invitation to "communicate, in writing," 
 »y vifWH iflati\t^ to th<; Muhj»icL-niattt!r of your invc«tij;atioiiN. 
 
 1. Tills, I utMicrstfin<l, \h to ajHccrlain tti« causes, as far h.s jiossihlc, of thi^ present 
 dfprcHsioii ill the induslrios of tlio ciounfry, and to rccivivtt snjjircstioiis on tho siilijcct 
 of riiiic«lic.s within tlic domain of Icjjislation. 
 
 2. Ah a stalling point, I admit Jlui prtinisos, uamoly, tliat tho country hrw hccn 
 passinf^ throiijih ono of thos<( |)criodic cris. .4, in HHarly all its in(iiistric*t, aincc tho 
 panic, of Sf'ptcniluT, iHTtl. Hut, at the same, time, as a stiidentof cci iiomic phcnonu^na, 
 I cannot admit that the causes which Itsl to this panic ditfer materially from those of 
 other similar experiences, of which a larj^i; unmher of hnsincHs men ami economic au- 
 thorilicH, still living, arc co;^nizant, and of others, reconh-d in the comm«^rcial history 
 of the world, since the coinmencenuint of the present century. I also qiicsticm tho 
 assumption of some who havi- testilied before your committee, that the sta}. ation in 
 business since IHTIl has been greater than existed in 1KV», H;}?, and Hr)7; .» which 
 twt> latter periods my own personal reminiscences extend. Fnithermoie, I am of tho 
 opinion, founded on my own paiticiilar aM)cali(tns, and a {general knowltMlgo of in- 
 dustrial pursuits. )nore jiarticularly in Ohio, and other Western States, and in Canada, 
 that tlu' pre+.enl < risis has nearly run its coiiixe, and that we an' enterinn; on a new 
 
 -era of prosi»erity. Kntertainion these frencr.nl views on tlu^ subject-matter of yoiii 
 inquiries, 1 feel biuiiid to .■ui^ij^est that any remedies attempted by ConjiresH slu iihl bo 
 general in tin ir character, and be framed with the view t») the pievention of future 
 ffriwH by removinij or diiiiiiiis)iin<; the intensity of their causes. 
 
 '.i. 1 have been ciitjaf^cd for a third «>f a century in what may l»e called raii " ly busi- 
 uesH, as contractor and linamier, and shall contiue the facts I have to communicat'^ 
 chieily to my own branch of industry. My tiist labors in this busiiu'ss were dir«M!t<»<l 
 to tlu' furtheriiif; the construction of railways in Canada and Mi<hi<j;ait ; and in 18,')! 
 I renuived to London, where 1 devoted some years to raisinj; British caiiital for rail- 
 way construction, so that my experience has iiad a wide range, . !ore recently, in 
 lf^2, I undertook the constrn< tioii of a line in Ohio of considtMalile Tiiagnifii(!«., only a 
 small part of which is jis yet conipleted, owing to th<> pani<- of 1«7:{, and that part I 
 built last y<'ar. 
 
 4. At the tiuH' I took the contract, in IHTi*, there prevailed throughout the country 
 vawt aitivity in the railway business. The annual constriu-liou of new lines had ris<!n 
 to no less than 7, ()t)l) miles. This unwonted and vast expansion of the railway busi- 
 ness gave employment, directly and indirectly, in construction and providing rails and 
 other materials and (Ujuipment. t(» not less than one million of men, rejncsentiug a 
 populati«)n of i)rob!ibly not less than four millions, who li\<d by this vasi orauch of 
 imiustry. A Huperabnndant j^ajier currency had intlated all values, the market valuo 
 of labor included. The «'!ipital expended was i>artly rai.'^ed in many ot the localition 
 where the lines were located, and partly in Kastcrn cities and in Kiirojie. New York, 
 London, Paris, and Frankfort bankers rcape<l iiiimtiuse prolifs by " floating loans" on 
 mortgage bonds for railways sonictinies existing only (ui pajicr; and many of tho 
 " land-grant " ju'ojectors simply divided the proceeds among them.s.lves, without build- 
 ing a mile of railufiy. In Ncn-th Carolina there were seven lines which had bo«in partly 
 buili by .S.ilt ;.,! iiit^. wliose managers got the Stat<! to ai>|)ropriate $l(j,(X)0,(K>0 more 
 of its bond.s, under the juetcxt of "completing the State railways"; and eleven mill- 
 ions ol .-HI li liinds were bnuight Ut New York and were sold or hypotheci'tod at Irom 
 30 to tiO per cent., and, with only one or two insignilicant «xcej)tiontt, the whol«^ ca^^h 
 HO raised was stolen. What took place, in North (Jarolina was repeated, to a greater 
 or IcM.ser extent, in all the States under carpet-bag iiile. A( cording to a statement 
 
Iliuili l>> ill* liitr iluiiur Clfili^v. .iImiiiI iitif lillliilli-i| lllilliuiin of il<itliil> of SMlthrm 
 KtiiU'M IioikU wcrt' tlmn |iiit on ilic niiirkfi, jiihI <sit> <l<>llar tlM-yvMif «m(M ur |ilril;;«Ml 
 for wan tolallv tiiisjipiilirtl ur sfDlni liv ;;<»vi' arw. I'liifcd StuU'M •Sfiiutm-s, iiiciiilttTHof 
 ('on^ri'HN. iiiiil otiicr I't'dftul «iiil Statr utHriaiN. 
 
 r>. What iiiattTiallv ti ih!«<1 1u iiil<nNil\ iIm- k'"'"-' luilway infladon wfn- tin- larR»* 
 HiiinH \oti-il liy Cmi^rr.sH I'lir hiiliHi<li/ril lialimiiil Iiimn. 'I'lifNt- v,v\f rallnl "I'aritir 
 lailwavn," whrlliiT lln-y run Nortli or Soiiili, Kant or WchI ; aii<l, as tin- (rovcriiiiHiit 
 Ntootl in till' iiimitioii oi' M-ioiul-iiiortua^*! Iioiiilliolilt r. tlic tiiHt-iii<iil;;ai;i- IioihIi^ wen-, 
 in moHt cam'M, as yood a^ ;.'o\ n iiniciil Mriiritirs. TIiiih it liapiirm-d that ijoM'iiinuut 
 fnriiiMhid, in nearly all <iih.'.s, thr fnliif ra|iiliil vxiirndril in tin' const ruction ot' Honi»< 
 thunnands of nnlcn of lailway. while tin- Npcciiliilors. I»y means of Cntlit MohilurH and 
 other devi(cs, realized out of the company's liomls and stock a clear piolit exceeding 
 the entire coHt of these HO called '• I'acitic railways." It in cany to perceive how th^^we, 
 vast national and Slate jrninis stimulated the Imildinj; of other " nnsniisidi/ed" lin<'H, 
 and how the t<ilal expendilnres inllated all other hranchcs of indnslry. So Ion .{ w* 
 prices, w In thcr lor lahor. or materials, or food and clothing, hiinls and tenennnts, and 
 w>ciiritics continned to lise, cveryhody (am ied they were urowin;; rich. In \f*iVJ I 
 puMished in Washin^rton, and ciicnlatedin < on^ressional cirdeh, a pamphlet entitled 
 ''The Seieucii of Money," in which I ]iointed ont, com i.sely and clearly, what tlm iii- 
 tlatioii of the curniicT was leadiPfi to. I poiiit4-d out how the market valiu' of labor 
 <«n<l jjoodH first felt llie delnsive intlnen<<'s of snch a cnrrency, ami how lands and 
 lionses followed, and h«»w their value woidd snhsiile w hen the Imhlile Imrst ; hut no 
 ouo then li«i«'de«i smh information. I allmle to this lndchuie, because the renwMli*'^ 
 for fntnre ciises must he founded on a radii al ( haii^^e in oiir system of hanking and 
 the methods of is^ninJ^ cnirency , wherein the incijiient causes <if crises have their 
 origin. 
 
 ♦5. Th<iiif{h railways stood most jnoniimntly forward in the list of causes leadiiif^ to 
 the jtani<- of IH7:{, and l!ie stH;;nation that li.is sijne existed, all other industries par- 
 took of the intoxicatin;r drau>{hts administered hy the national ami other hanks, and 
 tlip jnoveriuneiit itself, and the "c.irjK't-haK"' State adniiuistrationit. To illustrat«^ the 
 ••ff«i('t (ui the <ost of railways and the wages cd' railway "» ivvi«'s," I must return to 
 my efforts to c(uistruct the line in Ohio in I'^T'J. I'rior to the overissue of national- 
 ])rtnk notes, after the estahlislmient of tliat system in Ii^U. the rate paid for skilhtd 
 ■ ahor, on railways, was alxnit $1 a day, or ^'Jt! a mcnth; and the pii(e of iron railn, in 
 Oliio, was about f4<> a ton. The pricl^ of laborers' board, before the war, was ahont 
 $2 a we^k. In 1H72 similar labor was ^-i to ^"J.'J.'i a day: board, ^1 to !jj.") a week; iron 
 rails, jMt a ton; ami all other materials, including engines, cars, Ai'., in proportion. 
 I now come down to present prices. Last year I |»aid |<l to iBl.lo for '•navvy*' lahor; 
 for board, ^\ to SM.oO a week: .*:{;'> a ton lor iron rails at mills: ami m>w 1 havp ottorB 
 of labor at HO cents to SI a day, or ?>'2(» to .'J'Jt! a month : board at tfi.'id to '^W a we^'k, 
 and bootw and clotliing at ante-war iirices; and iron rails, for cash, at mills in Ohi»), 
 per ton of 'i.*i4(> jainnds, i^'X.\. 
 
 7. TluuioHt of railways, like the cost ot' liouses in cities, wuHinore tlian dotihlo, during 
 the period of inflation, what they «an n<»w be built for. Lea\ ing the " wati-ring" pro- 
 cess out of sight, a .standard-gauge line cost about $'.i.'),tKIU a mile in (Miio to build and 
 equij) during those days <tf greatest inflation ; and the speculators, bankers, managers, 
 an<l promoters adtled $'2.'), dODpermile more, and, in some cases, ,?;:?'),((( 1(1, for their profit*. 
 Now, lean build an average stamlard-gatige lim'inOhio, oralmo.st any WeHtern State, 
 for fnmi $H, 0(1(1 to itil(l,(l(l(l a mile casli, including all materials, but ex opiipment. But it 
 is tnoro ditticult to raise |I(I,(KI(> a mile now than it was then to raise i3;2.'),(l(lO. G(K>d 
 snhstantial narrow-gauge lines over an average of Ohio country, laid with ;ir>-pound 
 iron rails, can at juesent be built, ballast«'il, and fenced for frmn .•S(i,(KI() to .|7,r»00 pei 
 mile. 
 
 8. These facts fre both interesting and instructive, as bearing on one of the largest 
 hraiuihes of «Mir industry. Onr railway system is less than half eomjdeted. The. |>e<> 
 }>le perceive that by putting their own means intocheaji inirrow-gange niilroads, thev 
 <'an make them )»ay. Ilenci" there is in the West (piite a revival in the coi'struction 
 »>f these cheap lines, hereafter destined to take tlie place of <;ominon highways, to a 
 large extent, which will serve as fet-ders to the old standard-gauge, highly-watered 
 trunk lines. Let me here suggest to your <;omnnttee the desirability of constituting a 
 national railway dci)artnn'nt after ihe ino<h'l of the Ihitish Board of Trade, but with 
 mcne comprehensive y)o\veis. If there is no warrant for siudi a hoard in the organic 
 laws of the inition, then let Congress take m -asures to ameml those laws. The civili- 
 zation and ])ros)ieiit\ of tuitions an' in the ratio of their facilities for transjiorting per- 
 sons and jtroiMTty. The National Legislature is less likely to abus<' such ]»owers than 
 State legislatures, wliose members are '' bought and sold like sheep in the shamhles," 
 by speculators and cajtitalists, for money and interests in public undertakings. W« 
 know from nncjUestioiied testimony, before a Senate onmmitt«'e in tliis State, that over 
 <me and a lialf mil1i<m d(dlar8 were expended hy two great railway companies to in- 
 fluence legislation in a single session. Meiuhersof C'ongress will hardly again become 
 
inoMlliffH of rriiht Moliiliir ii)mi>JlMii'H. Hut it !•< i|MJt,. f;».^;, Ik -n cnli.fi :ict f lie bII>{- 
 
 ^♦vHft <l ijiilwii.v ill |i,iriiiiciit iiH ti> Uti|» it *'lii\i' r:i'^ur'»w ill — almvi' xii.H|ii«ion." 
 
 '.». It will III' rnKjiiii/.iil IIS Ik jrniif. ifiint- ji. mII rviiliiit truth, tli.ii wiicii we liikv«t 
 b»'»'ii 111 til- III sill 1 1' am iioritiitivijy iIk" ciiusis iiiiil ifVi-its ut'inii rui;viir:;il irisin, w itii if>« 
 li>ii<; rlitiin of(|isu«ti|.i, tin- wiirk of iiHJiiNti ii'N. iiml tlir liiiii ml Miiiiil min ntti'tiilaiil 
 tluri'tui, \\i' liiivf iMiJv I nil I illnHtiiiliiiii a liiifW ot «'\ its rrsuiliii;; ill In i t'liun i)iiil jpyis. 
 I.'itiiiii 1)1' liir iin|iri Iri't iiiiiH il liiiiuiiii Mix'ii'tv. Hilt liiTi' I liiisi' tin- ijiii'Mt uxi, aro nut 
 tho.si' iin|ii-rt'i'rl iuiis t iir irwuil lit' laws niaiU- to oM-rriilr ihr iimIuijiI la\SH? 'I'linsi* wlio 
 fiHv»' iiful till- ili'li:it".s ill llir |{i II isli l|oiisi'!« of I'arliaiiii'iit, ami I'C (Niiii;ri>f4s, siiuM- tho 
 coiiHiilriatinii lit' till' laiiioi's I'lilliuii lvi'|Mirr, in Hln. uii tin- n rimi'iiii' ol rarli of llin 
 Kii-at iiiilnslrial irisiM, nuist lun mrivtil at tln' roiuliiHiuii I lia\r, tliat i-aili tiiiil all 
 of tliriii luiM- liait a toiiiiiiiui nr ill. It iiiiiy lit; laid down an an iiuniiitaMi' law 
 of iiatuir lh:it '• liki- i auscs luriilr like I'tt't-rts " Li-I llio.si' wlm haM' nut thi' tinn'to 
 waili tlirnii^ili imiiMim^ noIuiihm i I'arlianiiiitai y anil ( 'lllly,|■l■N^illnal ili-liati'H, at ImiMt 
 r»>ail til- w iiiiii.i.s ami H)ifi'rlii>ti»f Jrtl'i r>iim ami Maiii.sKii. Ilaiiiillun. < allniun, Widisti-i, 
 ami Mi'iilmi. tlir mastrr iiiimls ol' past yi-iuTaliiMis. ami *'.s|irriall\ •il'tlii fliirr la^*t, hn- 
 twfiii I'^l.'. ami ]">•*, ail'! tlirv will |Miri-ivi- ii xsi ili-arlv lliai iIhni iriMS ari' iliu', to 
 banks III ixsm- anil ilisconnt. TIiih ronrliiHioii 'I' ;jii-atly nairuw tin- limit i of iiivi>H- 
 ti^ation on tin- jiart of your t-oiiiinill>'i'. 
 
 111. I lay it <low n ut^ a fiiiiilam«-ntal prin('i]ili- tliat titlirory or a fart ili-iiioiistratt<(l l>y 
 iiiatln iiiaiics or liy tlio sriciiiiMif lo;;ii' Ih nioit- rrlialilr, iiion- to Uc ili|ii'nili-il mi, lut 
 thu liasJH of ii-yislatioii, or. if you liki-, as an ai ri'|iti il ilfHtriin in |>oliiii a! sriiiu'o, 
 tliHii I iirii.ssiini|)tioiisofi-ni|iiririsni. I'aii)iiriral nasonin^ is i^rm rally ilrawii Iroini'iM li 
 iii.'mV |M-i'Minal rx|(crii'nri'H, Tin' slati-sinan or llir lt';iislalor who fiami's his law-, on 
 tlir ihroriis of •' prarlical nu'ii," is |)riit.\ riit.iin to liml liinisi'lf in I Im |>ositii>n of lli»< 
 oil! num with his hoy ami tin- as,-,, in tht" fahli — of tiyinj; to pha.-f I'Viryhoily. Hut 
 no lii-Mi-r illustration ran hr .^ivi-n than that |ii'i-s«-iitoil liy tlir iinnii'roiis no.Htrnins roc- 
 oniini-nili i| liy a laryc niiinhrr of *' lahor rofoiiin-irt " iiml otln-rs, to your i oiniiiitI,»t\ for 
 ri'ini'ilyiiii;' tin' pii'smt Htai;natii ri in liusini'ss. No two ai^ni- ; ami it is not doiiiij vio- 
 loiiiT to iriilli III say that four- lift lis of llii'sc nosi niiiis .-iri' tin- vi-rii'st nuusriiM'. 
 
 1 1. Sialistiial larfs an- valualilc only so far as tlii-y siivi- to i-sialdisli loiiiral diduo- 
 tioiiN t'loin know II raiisi's, oi' to illnslralr. fumlanii-nt.tl primiplrs. I havi- fril it m■■'l>^t- 
 Biiry to lay down tlii'si> ijjiMii'ral propositions, hccaiiHC^ I w isli to luiii^ this'pn'stion to tlit» 
 t»!Mt of ilosi' lo^iral rrasoiiinj;. 'riiriiinjf to tli<'V,''<'iit I>anir of 1~!{7. wr liml that '* on .(an- 
 uary I, l."^:!?" ( 5 ipiotc Mr. Spanlilin<;'M Ci-nlrtinial addrrss to tlm Hankirs' AMsoi-ialion), 
 "the hank rirr illation of thrrounliy, arcordinji to tlii'TrrasiiiT rr ports, w'as!S14!>,0iM>,(IOlt. 
 Hy Jamiaiy 1, l-^i:;, it was irdmi'd lo .ti.'i^.lK OlMi; a ruinous I'.i!) of piiiTs wa.s tin- con- 
 xri|Hi-iii I . " (Joiii;^ hark, Mr. Spanidiiiji tills ns. "in tin- .iim'ii yl■ar^'. from Irtlili to 
 Iw I?, no less than :!lil muv h.inks sprang into t'xiNtiini-. w ilh a nominal «!,if)it.al «/f 
 $1 |.->.itiMi.tMH), and .■SV,t.(MlO,iMH» ,,t additional ciidiliitioii. • * * Tho loiitus iiior(^aH»>d 
 from tf>(i(i.(iiiil.ll(Hl III $ ,v!.'., 1100, til 'II." 
 
 I'i. I'lii'ii canu' the ;>ri'at rollapsi- in a tiiiuMif profound piiiir. ThiTc had lu-un no dn- 
 v.astatiiiti rivil war, no waste of lahor or cipital » ipiiid t<i di-slrurlion insti-ad of ]»roi. 
 liiiction, ami not until tin- lap.sn of live vi-ars did tin- coiinlry show Ki;ius of vt'vovory 
 from it." ajjony. In M4;{, <-'liiirli'.« Miiki-ns, wriliiiii from Ohio to his fiii-nd .John ForsU'r, 
 Huyw, "'I'lirri- is no money, alisoluiely no money in the eoiintr\." Me found tlio newti- 
 pajiers Idled willi aiherlisement-^ otIiTinti yoods iii e.xehanue in the m.aiiiior snpponrtd 
 to havi^ hei'ii done in the nider periods of soeiety. 'J'raile was ouee moi-e eoiidmtiMl hy 
 barter. Men f^ave their labor for boots, shoes, ('.iothin;^, ami food. At the jiriSHnt 
 time men an^ to he h-id by tens of thousands, payable in food, eioth'iij^, and lodyinj?, 
 beeaii.se there is uo eapital, not m«/i<v/. t'>r there is plenty of that, to pay tliem, or. at 
 leiihf, none that is available. Mr. Siiiiuidini^observt'.Hof the pjiiiii; of H.")7, "This crisiH, 
 like tlu^ revnlsion of l."<:{7, was eansed by too j^reat an expansion of eredit. I>ebt iitall 
 forms became excessive. 'l"he railway system had beeome laijjely extendotl upon biir- 
 rowed eapilal. There hail been excessive importations of l'oreii;n i.joods. The ba.nkH 
 loaned too inneh of their funds on stocks, bonds, and other securities that eoiiid noti4>o 
 readily ciinverted into nioney to meet checks of depositors." 
 
 l:!. When we. read tlui descriptions of ihiii^H aw they existed just prior to IB!{7 anti 
 1857, and coinpaic tlieni with that of H7:t. it .soimds "like an oft-told tale." Tho 
 national irovernmeiit, after lillinix all the (hannels of circulation with an irrede«Mnablo 
 p.'iper issue, added dnrinji t he, closinji; year of the war, hii the iftniion of the 7iational- 
 hank Hiixtcm, uhmtt t;!.. 0,000,0(10 to tin: then crixtiiitj htivk ami Trraxui'if rirrnlationH, and 
 based the vhide bank issue on public seciirif ie.s instead of metal. 'I'o cap tho ("lilnax 
 of folly, after Mr. Me(,'nllocli liad taken out of circulation $14,000,(100 <d" national 
 notes issued direct to th«i pnblic/, instead of tlios*^ loa'ied to the banks, a new isniie, of 
 ^M.Ooo.lloO was authori/eil to be made to ami throu<^h the banks, in 1H71, under tho 
 absurd pietexf of '' equalizing; the currency." 
 
 14. Thus it w ill be tteen Congress, by a law for which there is no warrant in tho 
 Oonstitulion, anthor#PH the londinj^ of the national credit in the form of "national 
 purreney." at I per e»mt. per annimi, to banks, which ajjaiii lend it to tho public at 
 
7, H, '.», or 10 jirr «fnf., iHTonlinif Ut the r;it<' allnW'tl Hiul ftn'v:iiiiriu iii the wxri*.! 
 Ht»f''!». Th«' iHKiii' nf piifi.r rnowcy on s^ovmitfH til m. iiriiityi, iw* in llir niMiol' iht^ H.iiih 
 of Kri>rtjiti<l, iiM ft» C ir..(HH»,(Mlu, ;»nll t»i th<' ii.iiiiMi.il h;iiikM, or on no H.i(nritif«« at all. jh* 
 finuluiiHMitiil i-rror in im.n.-trti y tnoiioiny. I'^por iiioih y, Moiciilihcully ntianli*!, i»t 
 Mimiily A HiiliMtitiitr tur. :imiI h iiuhk coiivfiiicul tool lliiiri mcljilli<' iiioiify, on \\|ii< h it 
 Hhoiild iilwivyH ri'Ht, :iiiii liki- inctHlii<' luoin'y, tiio.slt l.-ariy, hlioiild \>f iKKiinl l»y a <lrfi;,irt- 
 in«'iit of NtHfi', iiinl itH voliiiiH' tun only Im nmiliitrd l>y Hujiply :iii<l ilfiiiiiiiil. 
 
 Ifi. WhtMi li'ft to tlu! <lisr.r<'lion of liimkH, iio\iriniti l»y tli«- Htiony iiioiivi- of Bftif 
 iHf«T«'Mt liiul prolit. tlii'tr JH I'viT !4 Ifnilcii. y to ovitIsmh-h ttiiil iiilhilion. I.onl Ovnr 
 
 utoiii- itii iililo \vnt<T Hiiil »lo!^' iiml iii;<iiiHl« oliscrvcr, wayf 
 
 It i 
 
 M now ilim-oN < 
 
 ir«<J 
 
 thtT*' JH a lial«i!ity to ovirissncH of pupiM looin-v. wliilr tliiii, im>in> ih ^•ollVl■rlilli«^ ut 
 ■will." Mr. .1. h." MrCiiIlorh. in liis noton t4> tlm "VVi-ullli of Nalions." Kays: " I'li*" 
 wi(l<'Ht t'X(n'rit'ii(<' provis that no iiiiin or mkI of incii nvor liiul lln' powi-r to iii!ik»' iit 
 «'oiiv<Tliltlt» iHsiH'H of puptT mi>iM>y wilhoiit, alniHinic il — that is, without isMiiiiiir it in 
 
 iiiortliiiali' t|iiantiti«>s 
 
 i'ho n^-xtiiK't nil nl tit t In* n-Mtriclioii on c:\!%\i pH\ ni<-iit«« 
 
 Ht th»i Itjink t»f Kii'^laiul, uii'l tho riin«itTiii;j il pii|M'liial. would havi' no p«icfptil»l#- 
 «*fl«'.<',t on tli«' value of liaiik uoIih, proviih <! tlnir i|uaiitit.y wt-r*' not at tlir khiiu', t'Mi«- 
 in<'r«MW*t<l. Kill thvn- rannot hr r duuSt t^tit nndir xmh, lircnmylamrK il would ht iiuri'iiMCil.'' 
 
 H'l. !>aiii<)l WcliKtcr, liki I.onl (»V(|hHiiii>, naiil: " Kvt-n ronv< rtihilily is no nu>»r»n- 
 t«<4' HjjairiHt <)vi»ris.snr.." IN- v^.'ih spi-Hkinj: of l>anks and tl\i> «'HUr«i'« of irises when he 
 ina<le thiM leinark. The New Vork Tinies, the most inllexiltle advocaie ol the pres«'nt 
 lime of hank.H of issue, in its le;vder of the, 'JOth Septeiiilur, liilly eoneedes this histxir- 
 ivikl fuel,.* As I havt helore oliserved, fhe triM'' seieiitilie. method of nuardiiij; paper 
 money is in the lijrht of a niore convenient tool than nielallie, money, and. ax Iht^ pub 
 /(/; htm to pay tktt JuHfaa: ralui I'nr the nvtii^ Ihfo rii/uiri , ilx ixHUO nhmld he mnorid whollf 
 J'r<nn brinif (ht xuhif^t inaltir of profit to prirate ,»• />Hblii' xxtun*- Kx<ept aw to tlii\ isHite 
 of thr> Hunk of Kn<.'l:kiitl of.at present. £1."),0'HI,(MMI sferlintj on sec'initieh, the issue of 
 the bunk is a Htut.«' issue, and the iiote^ are ull l)ou;;lit iml puid for hy the puhlic or 
 hunkers lor use in their liusine>iH at and for their faee \alue in >jolii coin or hnllion 
 The issue on secnritit^s isu violution of the hi;;hivst fundamental priiicijile of monetiiriir 
 H«^ii nee, whioli de.munds u paper currency founded on lhi< iiietul most stuMe in it.s mar 
 ket vftino in comparison with other siiitalde metals. 
 
 17. Thin principle may he thus jiustulaKnl: "That which is made h\ law the mcv- 
 ur« of ull other values, iiicludinir ihat of lahov. should lie of the hi;;he**t known slulul- 
 ity in its own murk«<t v.-ilue, umoni: tin metuls suituldc lor <-oinaiie." 
 
 IH. The issuo of nrdes on securiiiiM may he renanled a^ a plan wlierid>v a small claMN 
 «»f capitalists arc cnahled ti»own or possess themselves ct a iiKitituhle investment, and 
 ut the HunK"! tiriui to Jiave if(> percent. o< its line value in money. 1 hold that dm- 
 Hre** luw i\o {Miwer under the «'«HistittJtion to trniiit such u ]irivilefje to u small cliisw 
 of luvored inve«foi-H in ^^oveniment bonds t.<i tin exclusion of all tdher members of tin- 
 eomniunity. The jilan of Icinlint; the public, credit to nution.'il bunks in the fnrm of 
 " national eurr.'ney," for which the (jovenimi'nt acts as trnstei — no odds how fjood the 
 WHMirity piven mav be — isu vi<»lation of that jjnat primipleof human ef|nality s«'t forth 
 iu the Duclarution of Indepirndenec, which Hintnld stand like a second Ma^na Oharta, 
 a bnlwurk against injustice and oppr»'««ion, "All men are bom fn-e and equal." If 
 there is any sense, any truth in tliis propowition. Congress continually violat4's it by 
 making laws in favor of chvsws — laws which make the lahorin^j majority "the hew- 
 ors of w(Mid and drawers of water" to a favored few. Thi'seare iiii>h moral and polit- 
 ieal considerations, cominfi within the sixipe of your inquiries, •gentlemen of the com- 
 uiitt'tM) on labor, and their bearing and rtdevancy to the pnvM-nt and future of our 
 indnstries cannot be overlooked. I therefore quot^» iu» appropriate the postulate' 
 formulat^'d by Daniel Webster, as indicative of a sound n»etho<l of providing a j>a{'er 
 ennrnry, now an indispensable neeetwity to the indnstrial w(»rlri. 
 
 19. "It is," said the ilhistrions MasnachuHcttH stat4sman, "the constittitional duty 
 of government to see that a jirojier currency, suitable to the circumstances of the tim»*. 
 anti to the wants of trmleand bnsiue«s. hh well as to the payment of the debts «lne to the 
 govcrnmeut, be maintained and preserved ; a cnnrency of general <',redit. and ca]>abl«.- 
 of aittiug the operati<uis of governmeut, so far a.s th<»se operations may be condnct«xl 
 by means of the circulating medium: and that these are, duties, therefore, devohiug 
 on ('tmgress, iu relation to curn-ncy, beyond the Vierv regulation of the gold atid silver 
 coinH." 
 
 * Tlie TiniPi( r<'niHi)<H as followH? "Duo fiMSt wiiich g«x-« fiiither tliiin any othet in expluiiiiiiu the 
 pr«!Hcnt eitaation iH (hat thori^ li:i« never N^-n any Ion ^ time within the la»«t. hrtlf r>'Ututy when (he 
 whole roiinlry hiwi a muinil currency, tlmt In, a ciiriency of coin, iir of papet c-iin- ertilile HnifhubituHDv 
 Convened into rein. P<ir the Inst sevent'X'n yearo thnrt* haH biM'u no 8uch currency whHtever. Pre- 
 (■♦Mling the oiithreMk of the wat hy onl> between tliree and fi'tir veiirH came the 'crflsh ' of 1W)7, which 
 'was aoconipaniod by a suapnnHioii of Hptsle p»yiuentn, and which had been caused by an HnorniouH in 
 tiatiou of credit, inctuiliuj; that moat insiducus and dani:ei'uuB furrn of creilil, banknotes. And hefoT* 
 tliis period, back to the recovery of ihfi oountiy fiona the w:ir of 1812, th«re was 8car«»<ly a year wliet. 
 banking wax not, on tho whole, irriiguliir, wl»»n a large riuantitv of notcH wil-e not in eircnliitinn with- 
 out the Hpecie to back them, or wbeu the oou^atry wm favortMi with a thoroaglily sound njid prudent 
 inauaireiuent of it* money affairsi." 
 
 .^#t%% ■ "^ 
 
all cInMH 
 ■nt, and 
 lit Clin-. 
 
 til i-.l.lSH 
 
 of th.- 
 f>rm *»f 
 •ltd the 
 t forth 
 hi^rtit, 
 ." If 
 it by 
 
 poljt- 
 coin- 
 f our 
 tiilaU- 
 pafxT 
 
 il dnty 
 m«*'. 
 
 lo th.' 
 apahh; 
 
 lu tod 
 t)l\iij^ 
 
 Nilver 
 
 inu the 
 icii vhe 
 )ituHl!v 
 I'r.' 
 
 which 
 10U8 in 
 
 bcfoT* 
 
 with 
 
 WO. I huvf nhitwii \» liiu I ••UKtitiit«'H "a proprr tiirniicy," iiuimlv. u ciirmicy i»>mi<<d 
 l>y n iiiitiniiul «lr)itirtiiM iit, to ull roiii*-rN, tor ;rold. I Idim* nIiovmi ilmt hnrikcrH nt mot 
 on any pi' text lifiiljnwrd (o iradf aiiti f<|>«'«iiliifi' on KiM'h iH-,tn s .it th.' cxpiiiHc cf lln- 
 who'r projdf, lichidt N, iiiid loflii' injury «>f iion ist»iiiiig huiik.s, vshuh rondth-t u liirge 
 
 oiiiil ot the Ir^iiiiiiati' ImNJiirHh ot the roinilry. 
 
 U\, Itrtdri' |l^lu^)dill^ to point out oilii r <'aii.'*< h of iiiflatioit, arisiiu! '*' mi had hiink- 
 Un, I rfHpi< tliill\ Miuntot. an fln' \u\1 nIi-ji towards tin- j>ri'snilioM (>> t'-.- as( nlaiin'd 
 <'aiiH4'H of t'l°l^«'^, lliat ; our «oiiiiriilt< I- (im.-'idi'r tlic |dan I h;i\i' inittly oiit!iiM'<l, id'coii- 
 Kti.iilin^ a national i>Hn»' «l<parliinnt, iiid«p« ndtni of 'I'nasiiry I'lol |ioliti<a! parly 
 iiitliit'no'M. W f lijiM- iilri ad\ an ••xcfih'nt Moikin^-ir.Mlcl m the natioiuki insiM- -■'*'■■■■ 
 
 :;iid < '<iiii|itrolli )'.'' i>) I'lulnM'nt, ^^ liii h hav*' i!lv\ a\ h )>' ii i'.ouiHtlv niid aldy nianaf,'<'d. 
 
 Ihit Milt '.1 a di paitiiiiiit xlioiilil not he iiii«lrr tli<' inlliirin c and rontio] ot' thx Min mii-r 
 
 of )'iiiaii(i . and slioiiid lie rfslricird to I lit- i^siu' and -lalf <d'initf« tor ji»dd, iift«i t''t) 
 
 inanncr td tin- Kank of Aiiihti idaiii. 
 
 Tht-rr in a HiihMtaiitial dintinilion iM'twi'tii iiirrriKy and iiiiaiici'. Thi' ono Ih n /oo/ 
 
 <d' iiidiiHt!\ , I III' othi T u i»tn (MX or inrthud of i-ondii.'i iiijij: I ho l»iiHiii('s> altaii'* of nations, 
 
 Ntati'H, coi'poi at inh", and iiidi\ idiials. 'I'hc ti'iii plat ion to nsi' the isxur of paper iiionoy 
 
 to cri'irti' ri'SMiiri cN ninsl ^oon^■l or lait r lie w Ih>)I> iriiio\ t-d from tio- thoughts and piir- 
 
 poM-H ot t hosi- \> ho iii:inai;i' the hiiMiii'ss atfaii.'< nt' nal imiH and liankh. If, alter uim)'Io 
 
 r\p«'i iiinc, I III- ni.inaiii'i N of 1 ho Im iii' dopaitnirn' lind ihi'm--olM'H pos.srr,.s( d of u larger 
 
 Mii|ipl\ of niiialihan is nri'dfiil to inr«nri' tlir ron\ri1il>iliiy of the national notiM, ti«'- 
 
 voiid pi radvi'iitnri', thi-y Nhoiild have power to inveHt hmiIi miii pins in piihlie HeeiiiititH 
 
 heaiiii^j; inteiesl, and to iei>«siie the >*aiMe, or new ones in their plaee, lor temporary 
 ; r ...i: .1 1: ti 1. ...... ..»' 1. 1 .;..' 
 
 iporary 
 pill poses ill ease of an\ unforeseen enier;>;eni'\ deiiiandiii;^ the piireli-ise id' ^old to main- 
 tain specie pasnieiiis. To )iiit siieli a s\ stein into iipeiMlinn would leiiiiire tinu' and 
 thitu-st piaetieal and ihinrelii al know liilf;e ot tin cunnlrv and thetraineil skill of 
 those ill ready in the i inplov ot t he TreasiirN i;.sMe ih part in< nt. I'he enrrene.N ipieKl ioM 
 has, next to slavery. Iieen the most agitated and iliseiis.-^cd id' aii,\ o| the j^ieat ualional 
 iMNi'ew. and is now hy far the most pioinineiit ImIhic the p» ople. Ileiiee, re^ardirij? it 
 as I <lo its one ol' the lejidin^ elements inv ol\ I'd in industrial crises, I hope I shall in: 
 excii.sed for tile iiioininenee I am ^iviiiii it in this eonmiiiiiioation. The time is, I trust 
 
 exeiiseii lor ine nroitiinenee 1 am ^ivinti 11 ''< 'iii'* lonMiiiinioaiioii. 1 ne. nine is, 1 irnsi 
 and helii ve, at lianil w In n it will hedivested of Jil! I'liiidann ntal irvors ;iiid the pas- 
 sion that enters into piiMie diseiission whenever it is im n'iot'.ed. 'I'he nionii nt the 
 iiat ion cuts loose liiPin .'ill eon nei lion with hanks ol' issue, a >• siicli, the ii.llation doi;iii:u« 
 will yield to coiiinioii scnsr. The o|iinion ;iaiiis uronnd that the issue intist he ii'adi' 
 hv the nation and for the nation's heiietit. and not for the special piolii ot a imie 
 handful of hankers. 
 
 'i'^. i have here to niiiaik on an iinportant example to sliow how iniieli a well-remi- 
 latoil not*' issue has to do in averting intlatimis leading to crises. Fraiii'e has Ihm-ii 
 i*pe< iaily free fioni these '• liiianeiitl eyi hmes" for half a century, under the i-siie of 
 noi»» hy the Ihink o| I'lame. I>iirinif the <rr<'at panic ol' l^.'>7, when the i.»nk of 
 Kny;lani.l noniinall\ siispemled under an anthmi/'alion (dilu- jiDverninent, and rnade a 
 wreck of a \ ast nninher id Imsiness houses hy iiinniiifi np the rate, there w.is sr.ii<ely 
 a ripple prodneed on I'nneh tiiiaiu'ial waters. There wa.-' no run on h'reiieh hiinkeis, 
 and the (reneral. indnstrieM remained iindistnrheil. That and other e\iin|des nUttw tlio 
 ditl'ereiice hetweeii a single isMUei. and two thousand lonijietini; national h^nks. in 
 ln7;l. 
 
 y;i. It has heeii f entitled lie fore your ennnnittee. 1 riily. that crises are de\ eloped 1: rider 
 eiri'iiinstaiiees sliowin<i that other causes than iiiiniiN ei t ilde paper cuireiny ha\e 
 produced them. 1 now propose to point out what are thes.- caiiHes. Mr. Spauldiii^', 
 in <tn« of the (piotations 1 have made from liis ("eiitennial address, stat«'s the fa't that, 
 "In s«!ven years from .laiinary I. !"':'>••, to .laiiuary 1, If^iT. the loans [of the. hanksj in- 
 erejiw'd from ^'Jdd.tldO.OtiO to 's:V2."..niHi.(Mi()." When we eome to aiialy/e the operations 
 of a tiank of diseonid, we naeh a ureat fundament il triiih. id'snpreme importance in 
 monetJiry «'eonomy, namely, that hy far the lari^er piopiuioii of hank disconi ts t-'^Xh 
 on >^o<k1s in eonr.se of production and disirihutiiui. I have juit this importaiit tiuth 
 in the form of a postnl; r •, as ndlows: 
 
 '^4. " Coinmodities. '.]< onrse of piolintion .■ind tiau'-niissiiin from jiinduciT' to c.m- 
 «<iiiii«>rH, or ultimate j»i ;i aasers. repiesented hy hilN of exthan^re. hills of ladinj;, 
 warehousemen's reeei))ts, hank credits, etieeks. and other devices invented hy tiaiik- 
 vi> ami merchants to faiilitate flu tiatisfcrence of dehts aiid <'ri'dits. eoustitnt4' the 
 hulk <d' tloatinj^ eaidtal dealt in in the loan, iinpro}ieily called the 'nmney' market."* 
 
 " Am this postulate einhraces a most important fiindameiital truth. I take the liherty 
 of ((uot'iig an extract ftom a letter I received in tin- winf.-i id l^7r»-'7«i on tin- nuthcKl 
 I have ad» jd4Hl forstatini; in a concise and strikitinmanii'r hadinj; jninciplesof nioR 
 etiiry economy, from the pen of an aide writer on eeoinmuc sciem e. Trot. Itou iiny 
 I'rico, of Oxford. 'Ihe professor says: " Sti many thanks for yourleft^'r iu llm Ameri- 
 can. Tiinew. It isexceedinj^ly ^ood. and I rejoice over it nnu'h. ospefciaDy the powt'j]at*c 
 and princioh^H. The '(IJTith in my fortheoniin^ work)' is capital. I had t' ooujfht, 
 hut not deiiUitely mid vividly exjireswci. The menniu^ jmupi? tui tht- rea^m and inu«- 
 tern luiu. and it is most true." 
 
8 
 
 2r>. I will givo anotlu>r postulated truth, which, tr<itj»'<thfir with t.h« f(»re;?oiiij;, will 
 rover the whoh^ husiucss capital dcalfc in \>y a haiikt'r, ')«\von(J his own triwiiuj^inarjiin: 
 "Floating; ('a|)ital, or 'tratliiijj po\v«T' othor than that siicciHtid in th«^ hint poHtiilate, 
 oouHistH of money, the Havinf;s of industry, and ^h(^ surplus ineomo of(;apital, noi. yot 
 invested in nioro permanent tliinjis, or in lands, houses, iaetcuMes, steam and oth«r 
 vessels, or in tlio shuns of steanisliiiis and railways and all nninner of continuing 
 uiMhTtakinjfs, whieli perpetuate t.heumelves, when prudently luainifrod, or in thiugd 
 not destroyed in use." 
 
 'Jd. It n>ust, in order to reach a clear comprehension of tlic p<»wer of hankn for inflat- 
 ing the imiustrial pursuits of the p4>o]ih-, he home in mi) that a largo part of thci 
 latter »les<Tipti<ni of capital is held on deposit by Itanker md is loaned, alon^ with 
 tho " j»rocee(l.s" of hills representinji goods. It must aluo he kopt in view that th« 
 proceeds of discounted hills are entered in hankers' Uidgora as "dejiosits," and aro not 
 distingnishahle in the pnhlished accounts from other, or what are called "cash depos- 
 its." I suggest that such a distiiuttion should he required by law. It is truo an esti- 
 mate e.in he nuide by comparing the •'discounts" and "deposits," but what I sugirest 
 is, that the facts shall he made ajipartMit on the face of the statoinonts, h<» that we can 
 detect where and when business intlation begins, and how it lluctTuttes. 1 have now 
 demonstrated that intlation is causeil by excessive issues of paper money and exoesBivo 
 discounts. Q. E. D. 
 
 27. It will be seen how the magic power of the banker turns goods into "trading 
 power," or tloating capital, fn>i<i the numient (he raw material is ready for the market 
 until it passes through the hands of the various dealei-s ami manufacturers, and finally 
 n-aches those of the numerous distributiiig airenrs or rtitail dealers. Each, in turn, 
 gives a bill t(» his predecessor in ownershij). in the chain of transfers; and each, in 
 turn, takes such bill to his bank, to be turned into trading pdwer. to which category 
 belojigs money, but which forTus only 'lu iusigniticant three or four per cent, of the 
 vast i»ool of trading power or tloating capital. It therefore iuippeiis th.it the same 
 bale of goods is n presented several times in the loan maiket ficlbre ii reaches the 
 final dij*tribnter — tlie retail m(>rchant. 
 
 *2H. Again.it very c(unnHuily happens, when inllatitui has set in, that ihe san>e bale 
 of goo(l>. or cargo passes through several hands in a few days or weeks, while in 
 transit or in warehouse, each seller realizing a profit on a rising market ; and, in reg- 
 ular and not purely sjiocniative traiisa(;tions, each buyer giving his bill in payment, 
 t(» be j»assed thiougli the "discount mill " and turned into trading power. Thus the 
 sum total of trading power lu-comes enormously expuTided. The market value of the 
 same products is reiucsi iited sevcial times in the loan market, and as ab(»nt 9i'> per 
 cent, of the "o]icrators" in these industrial ]»ursuits "trade" on n arginsof only about 
 10 per cent., it is perfectly obvious how a panic. stopi»ing the sale of goods and the 
 "disc(uint mills" all over thecountry, wipe out, as with a sponge, all the weaker oper- 
 ators "for r* rise," ami nunurous others who have been imprudent in the matter of 
 giving credit. 
 
 This is .1 true and in no degre<' exaggerated description of what happened between 
 the years IKIO and lrt;{7. when the loans of discount banks, which were mostly banks of 
 issue, rose from $^(M»,(»(l(t,0()() to $;'y.',(100,()()(t5 to say uothing of the imrease of paper 
 money, which went out through the discounts. It is what happened during the 
 seven years imn>edi.atcly prcc«'ding each of th(> panics of Id;")? ami li-<T,i; and those 
 panii's. ami the succeeding crises, al»d all others like them, are ])crfectly natural con- 
 sequences, resulting fr«un excessive bank speculation ; and we are Just now commenc- 
 ing another era of similar intlation, to be followed, sooner or later, by another panic, 
 and aTiother long ami agmii/.ing ])eriod of stagnation. Congress, in its ignorance — I 
 am afraid to say " wisdoni," for that would be what Mark Twain calls "sarkawm" — 
 has passtMl an act to provide for the "resumi)tion of specie payments, and for th« 
 establishment of free banking," the etfcct of which, if it renuiins mirepeahMl, must be 
 to work enormous evils in our industrial system; to some of which 1 must now vlireot 
 your attention. 
 
 ;U). This law authoii/es the use of the whole of the outstanding naticmal secnritie*', 
 bearing interest, and amounting io over one thousand eight hundred million <loUarp, 
 as the basis of issues ol |)a])er nuniey to banking associations. This is called "free 
 banking," as if the issue of notes formed any part of the legitimate business of bank- 
 iiig — which it most ctMtainly does not. No educated cconomisi will <^laim that the 
 issue of paper nuuu-y is a legitimate jiart of a banker's business. In England aboutHO 
 per cent, of all banking. an<l in France all but that conducted by the Bank of Fraiu'.e, 
 IS comlucted by banks that issiu* no notes at ajl; and even in this country, according 
 to Mr. H])aiil(liug, the mui-issuiug hanks ttutnumber those issuing jtaper money 
 mori'. than two to one. See OeiKennial .-iddress, last page. This so-called "resumption 
 act," over which there is smdi a fi'ss .and such a partisan fight Just now, is simply a 
 premium ottered by the goven\ment for the expansiiui of bank capital, an<l bank- 
 notes — of vvhicdi there is already a large excess beytuul legitinuUe business demands. 
 
with 
 
J 
 
9 
 
 fu thirt city <nnl in oilier Northern .ind Kn.sf«»rn cilifrt we see the prieo of cin»iliil niii^- 
 int; from one unil a Imlf to two or three per e,ent. per annnin, wh'uli is tlie oin> un- 
 \¥hol«v*onl(^HVl^ploMl ot derari^jiMl itnln.stries, stamlin;; most |>ii>niiiHHntly f'orwiiril in the 
 oategory. Who ran doiiht fliat Huh is not Ijir^jels dne to the excfvss ot" hitnkmji 
 eapitaI,«hH\vn Iromotlierindnstrieshy iiovcnimPnthoiMisesi»iii«l in ''national eMrreiiey," 
 ami to (lisconnts or loans made on stork-exehanf^e se<-urities instead of on liill^ founded 
 OH ijoodsf 
 
 ;{l, The piiueiple of free bankinjj, like the principle **( fne fra<les, is loMriijiHy ror- 
 niot ; hut the prin(i)de «)f a free, and all hut unlimited, issue of pajier innney on 
 Hoourities is fundamentally wroiiji. If such isHues are restrieted to oiui elass, then 
 tho (iovmiiment violates the elear intent cf tlie (!on«titution. It is the most obnox- 
 ious of all (dass sulwidies. It iH tlie ))aymeut of a larj^e hounty on hankinj; eaj)ital, 
 and, though a few hankH have returne«l a part of the bounty and withdrawn their 
 securities, for vvaiifc of emjdoymeiit for their share of the " national eiirreney," it is 
 only a <iuestion of time — a few incmlhs, or a year or two — when m\v demands will 
 again arise, which will render si)eeie ]>aymentN impossible, and will lead to a VHKt and 
 wide-8[)n'a<l Hi>eculation, found«Ml on a new era of l>ank inllaticui. One of the evilH, 
 ami it is no mean one, from wlii(di the country now sutlers is the withdrawal of 
 buHinesH tiai>ital from thousands of small and great industries and occujiations for the 
 estttblishmetit of iiaticmal banks. T!:^ idea of turning on« dollar inttt a dollar ninety, 
 by a Htroke of the pen, is very fascinating. 
 
 ',V2, The very statement of the facts, and the logical conclusions I have nuide in this 
 commnnication, slimild sulliciently explain the causes of the crisis from which wo are 
 juHt emerging, as well as suggest the remedy for the evils that will Hurel- result from 
 future similar crises. 1 wish. liuw«!ver, to treH]»ass still further on your time and 
 patiemse, by otiering a few brief general »»bservati<ms explanatory of the ojtcrations 
 of the natural laws of industry. The etiect of the expansion of bank credits, in the 
 manner I have pointed out, is tostimu?:ite to overfirodiKdion of goods, which jires- 
 «ntly leads to a glut in the markets and a fall of i)rices. There then hiiii|)ens tlm 
 reverse of what took place when values and prices were going up. Then the wages 
 of labor rose, ami the (Munpetilion among buyers was brisker than among s(>llers, and 
 everybody faueicd they were growing rich, and an era of reckless extra vagiuicc set in. 
 Ignorant lolly stiutteil forth in all its short-lived grandeur and laborers snuandered 
 their abundant earnings. Now, liowev<'r, after the ^i.uiic has come, and the sourc'es 
 of (iapital, largely tic.titious, drawn from bills discounted, are dried up, there are more 
 stdlers tha,ii buyers of goods and houses, and the paiiil'nl jiroccss of a n-duction of the 
 luxury of living and in the wagi's of laboi' simultaneously begins. (Micap goods noees- 
 sitate cheaji labor, and thousjiiuls of laborers are turned adrift, and an army of 
 Ho-oalled " tramps" is the result. Men. as a ruh\ prefer woik to begging, or ste.iling, 
 or, as it is now called, ''tramping." Hut there are certain skilled workmen who can 
 only be retained by the employers of labor on reduced wages, and who cointi before 
 yonr committee to tell their wrongs. Tlu'y demaml that(.!oiigress shall do something — 
 they don't very clearly know what — to relieve them of the evils they (complain of. 
 Hut I need not comment on their theories. As a rule, they are not [)hiloso|dier8 
 or I'conomists. What they fail to see is that, when the products of labor become 
 cheaii. their reduced jtrice enables the laborer to sell his labor cheaper, because he is 
 a consumer as well .as a pniduc.er. in a word, cheap goods make cheap labor, and 
 ehi^a]) lal»or reacts on the luiirkef value of goo Is uiilil Itottom is touched, until equi- 
 librium is estaldished by supply and <ieiiiand. 'I'hese ai<< ii.ituial compensalious 
 which the legislature cannot elle(!t. 
 
 U,$. Now, what ('ongress ran d<» is to s«'t to work, faithfully, earnestly, patiiMitly, and 
 hi)iu'.stl,v, to undo all legislation, repeal all stiitutes it has ]tassed from the beginning, 
 whicdi assiinw to control in- which iiitiinge the natiir.i! laws, which are as <'ertainly the 
 laws of (Jod as any w(» know ol'. This work must, of course, be slow. (Joiigress, act- 
 ing on tluM-rroneous theory that it can make better laws than the great natural Law- 
 giv«'r, has jdled uji a. vast masw of statutory laws, specially intended to change the 
 natural order of things in the industrial world. If iliereever existed a time when ''all 
 men were born fn-e and eiiual,"' it imi.Ht have antt-dated the existence of Collg^^ss, tor 
 nearly all its efforts seem to ha\f been directed to have men born uiie<iual. I'he evils 
 of class legisl.'ilion are very old, and cimiot be eradicated by the stroke (da pen with- 
 out causing great sutiei'ing. 'I'hey cling to society like barnacles to the ship's bot- 
 tom, but canmit, like barnacles, be sudilenly removed without injury »o the social ship. 
 Tile country has i>rosperc<l in spite of bad, and not becanse of good, industrial legJHla- 
 tion. 
 
 34, The theory that the legi.> ure should frame and <'na(t laws to direct all indus- 
 trial |mr-.uils in particular channels is iiol only IniidaMUMilaily wmiig, but has been the 
 greatest hinderance to the di'velopmeiit of national wealth. The true theory of iill iu- 
 (liislri<'s is till' in 'iiost freeilom of individual action to act ami to do, to buy and sill, t<> 
 Behcet .ami lollow.ou the part of every citi/,en,as to him or her seemeth best,ati,v jtur-- 
 
 An, 
 
10 
 
 8 lifc.jiiHt .'»8 each undjtUniB.v b»' inclined, without m rriiij:iii^<uu;h other's ri^ht«. Tt,w«" 
 liropoHitioiiH may hv \H>t*iulaWd uh follown: "All (ihHfruclioiiH piaocd on individual 
 riuhtH, in nHjx'ct to what in-opN' hIujII do <»r piitdurn with thoir <apit;il and labor, or 
 whon^ tht\v Hhall l)ny or h«-1I, ar«', dir«'(rt iiitriiiy<iiitMi(K of tlio natiirfkl riulitM <il niutiiiud 
 tin; IftWH of naturf, ; and arc iiijiirioiiH to nocicty just U> the rxt^^nl to which Miioh iutoT- 
 lV;n",nc«'H can Iki made i-flVctual." 
 
 li"). Th«' lawt iirviit orror coniinittfd hy ('(ni'^if'sf*, inHpin-d l»y a widr.-uproad p«)pnlft.r 
 dfltmion, and (iilculatcd to injuro induHtrial piirMiits, was fho piiHHu;f<> of thr ho «'.an«'«l 
 law for tho " rniri(»in'tizaf ion of Hilvcr/'Tliis law isa paljtahle infriim<Mnt>nt of Mio law> 
 <»f ti.id«v It in an attempt to rcfiiiliitc tin- inarkot xainc l»»'tAvr.»'u jfold and nilvor — tw.i 
 <'.on»nioditi(v4 — on»- of which is known to he very iiiiich toorci wtaldc in itH market value 
 than the other. ItH etfect, if it rertiaitis inirepe;iled. will he. perfectly ohvions. Th»' 
 silver didlar, which has lieen ovcrvalned. and made lej:al tender when a cortaiv> 
 amoiini shall he coined and ciKiilated, will certainly drive the iridd coin pnrrhaw*! 
 for two hnndred millions of iiiterest-heariiiii honds out of «irctilalion, if the jieople 
 will consent to accept, Hindi an iiiroiivenieiit and (liiiliijirin<i istandard <d' valne. Thoie 
 wan no exciiHc for paHHinjj this law. tor ever\ liody noIoI•i(lll^ly p^4^fers. for convcniiaiee,, 
 the. "f^reenhack" didlar, and t he ca pi tal invent imI in such 'M'lipt coins" tmint shrink to tlie 
 market valne of Milver hiillion, and chictly will the loss fall on the workinjj; c1a^>^. 
 who alwavH .sutler most hy a lliicliiaf inu; cnireiicy, aii<l who ate expected to liiiy th«i^<.- 
 dollars in exchange for llnii' lahoi at the tiold pi ice. Ir in, iheretoie, to he hoped that 
 your coiiiniittee will rccoinniend the imiiicdiii.te rcpe;il of the silver act. 
 
 ;W). There is a nionstroiis delusion )(rcvailinfi throiitihoiit the lomitry at the pn'seiil 
 time, and ont«M'oppin^ Htronjriy in Connrc.ss, on tli»' suhjeci at' paper money, to 'whi<'ii, 
 I preHiinie, your coiiiiMitiee will <liicct its attention. It is <lo<imatically asserted that 
 "thcro iH not enou<ih pajier money to do the husini'ss ot the country;'" and many uieii 
 of ilillin'in;e ^o so far as to propose to piiy otV the whole intcrcst-heariiii^ debt Ity tli<- 
 iwHUC of paper money hy the fxoverniociit. This iiha, nodoiilil, (ui^inated out of tin- 
 opposite, ei|ually eri-oneous, theory — now the law of the land — which proposes to ui-^' 
 the whole naruuuil debt as a hasis lor i.ssiiin^j national curiiiuy to national haiikM. H 
 thoHc who ciint; to these delnsiiuis will exercis»' only a nnideiale amount ot' rciusoniiifi' 
 ]>ower, they cannot tail to see the serious crrius tlie\ are tea< hinu the people, who 
 cannot, as a rule, acipiire a ciu'recl scienliiic knouhdi;e <if inoiictai\> economy. I have 
 Hhown that the tracliiij; <'apiial used in uiii- industries consists ot' about tour or tive ji.*r 
 ct'tit. only of money, ITi percent. (dCapitaJ sa\fd from the piutits of labor and exc«'*8 of 
 iucomt; over out <io exisfiu;; in the I'orm <d' bankers" depusiis, and some hO percent, of 
 trading pow«T advanced by b.mkers <ui securil ics jiiveu for ^nods in <-ourse «if iiroductioti 
 auddiHtributitM! to consumers, allot whichdcsciijitioiisof trad inj;<a pit al are made avail- 
 abl«^ by the, onndpotenl power of the clntck. Money beiu^i a wludly uuprodiictiv«' fono 
 of inve*itmeut, while other descri)itioiis as a rule, yield a ju'otit, no ^oiid bnsines^ niai. 
 will ki^ep his capital invest^-d in it an hour bcynudtlie time when he lan lind what hf 
 thinks will yield a return. It thus happens that no miu'c- nu>ne\ I'aii be kept in circ.ulatiori 
 than what is needed t'or <laily uses. Miuiey, ir. tact, is h.auliy used at all in the iarj^«- 
 imlustrics of the country. Its uses are, nevertheless, numerous, and it is iudisjteiisab^ 
 within the limits of those uses. One of these is the service it peifoiius as a uieasuiv- 
 of th«^ market valiu' of all thinj^s having market value. 
 
 ;f7. It w ill have been sikii froui what I have stated that 'MUT a period of intlation. 
 resultiu^^ from cx<'e«,sive hank credit^s (disc<uints). aceiunpauied by a rise in the pricejt 
 of lahoi and it^s puKluctions, there romen a jieriod ot' ciuitractitui, r»sultiu^ from the 
 annihilation of uumerons trading inar<;ins ut' capital and a laige diminution in th< 
 niimlHr and am<uint <d hills, al tended by luw juices and a si'anity of tradiufj; capi- 
 tal. It, thiirefore, lo};iially follows that ii is not more money, but more cre<lit capi- 
 tal, or billc, that is needed. It is also clear that in timej> of crises less, and not moi-«i, 
 »non«\v is demaiiderl, or can be held in active circulation, than in times of expaii»>ior. 
 If there is freti coina|i:e of all metal oti'ered to the i;overnmeuf. and the jr<(ve)i ment 
 has a uionofKdy of the paper issue as it has of thecuiu issue and as the hank id' Kranv^<- 
 has, thoH«' who have bullion for sale, ,is a riih . w ill pii'ler to accept jiaper in pasmeut. 
 .'IS they do in France and Knj;lan<l. Ilencf. under sm h a system, there will always be 
 exactly at* intudi money, paper and metallic, in circnial ion n.i tlw /««/)/(. uhn ahcatif< jhti^ 
 lull yrrict J'vr it, Urmntnl. Here we have a self-actinii pror»sH. or a juocess k«pt iri 
 motion by thej;reat natural law of sup|dy ami demand. If there is to*> little money 
 at any time, its market value will rise :ib(Ue the market value of bullifui .and the lull- 
 lion wil! come to the mint: if too much, coinajie will st<>p. riiis reasiuiiiifi, whith 
 s«M'niH t<iire iM denuinstrable as^eouiei ry. \sili siniw how very uns;it"e it is to di'leii'at* ^ 
 an iutitiity of banking assoi'iations the preroyaiive of the si.iie to issue paper nuuiey, 
 I'^inveitihle or iiieonvertible. 
 
 ;{f Much ('f the dolueion prevailinj^ amou;j the pertpli no dtuiht arises from the 
 not <liwtiir\mttt]Ujj hetwo«Mi money as money and othei kinds o( capital. Writ^ers <*o 
 ecoimu'i* Hieu<-e. t»ueh as the lat^' Mr. Uaj»ehot, author of " Liiuibard Str»'et. " polityci*) 
 
11 
 
 tl.e 
 
 Hp«}ik<rR, ftinl nwri h.inf+. htkI banktTH. oontirHiall\ f ''tiifotitMl tlif twf» ft rms. Tlioy 
 Hooak of tlio " nKincy ir.arkof " wh-'n Uioy incrvn thn"I(»;ni nuukct."' 'I hny talk of 
 'Vhoap" aiul "ilcjir morn-.y " ins(«'H(l of iln-ap ami dt-Hrfapilul. and so th*-! <iii<Mlu<'at4Ml 
 ]uiblic conic to (liinand " more Tiumcy," wlmn Dwrv is alr»Miiy an u\ccs^ luckod up in 
 thn vuultfi of the hanks, which Ihc ]ico)»lc rcfiiHfi to Imy. 
 
 'MK Ah tlic llrKihh inonctary HyHtcm hiiM iiwiiiy inlminTH. I wisli to ](oint, ont Hom<» 
 very wrioMH »lt fccfn in itM workinj^s, to whi<h an- dim the extreme Mciisitivmcwi of 
 MritiHli fiiianciai hiisiiieHH. ThiH seiisitiveiicKS iiiiscH from tlie jioli(;y of tlin Hank of 
 Kn/rland, in usiii;; its lar;,'p ( apilal and inlhien< c to eontrol the traiie in Inillion and 
 rnle tlic rate ofdimonnt. Instead of f|iiieliy/(»//</iri«7 or kecpinf^ in the market, it 
 directs it>« efforlH to operate afiainst the natural law of snj>ply and (Itinand. It will 
 it^adily he, Heen that, if its fradinj^ reserve consiste.l of »-oin or leff;il-tender iioteH 
 iHMiied hy the state, couvertihle into f^old on demand, and the hank tieased to he a 
 dealer in hnllion, except to mark«< loans on it. as on other commodities, this sensiti ve- 
 neris which it imparts t<i all industries would cease, because the nuimi^ers wtmhl no 
 lonj;«^r have a ni«iti\e to iict on the price of capital. They would have no mor« 
 int^'pest in the IliKluitions of the hullion market than in those of the corn, cotton, or 
 <'.heese markets, iirother com modi tics on which they make jidvanccH. It is no un(;omnion 
 ihing it) SCI' the Hank \>\' l")ii;;'.an<l rate from a li.alf to two )>er cent, ahove the market 
 rate. 'I'hc I fleet on the j;enrral industries is very injurituis. So far as the hj.nk can 
 alFcK't or counteiuct the law of supply nwA denuind hy its nu-re tiaf, it is the sanie as a 
 tJix set on labor ami its pmduits. which tax is raised or lowered by the arbitrary will 
 of a despcit, a)ul it is claimed by hiyh authorities thai the liank exercises this power 
 in order to pridit by its ctlccts. Whenever there is a considerable, rise in the bank 
 rate, securities in which the bank is a larjre d<»aler fall, ami the manaj^irs become 
 heavy purchasers. The raf^- is then run down t^xtreniely low ami n|> go pric,e+i, and 
 t,he bank '•unloadH." | hope your lommittee w ill not think I am coiitoundin>; the 
 pra<"ticeH of Wall iind I'road Streets of a few years airowilh those of Threatiuecdle 
 ."Street of tod.iy, wlnii I am mily relalin.n what Oxford ccouomisis and others of 
 hi<»h rejuitc in linaneial and econ»»mic circles have publiidy stated. 
 
 •id. My communication has urown so loni^ that J fear I am ovennnniny the space 
 yonr <'<uriniittee will have to '^\\v to such p.-tjiei-s. I uuibt, however, diie<-,t ycusr att< ii- 
 tion to the seiious evils arisinj^j from "protcctint;" so)rn< biamhcs of industry at the 
 expense of otheis, a^ifle frcun the bonus offered for attra<tin;i an undue amount of 
 capital U) the business of haidiiuf;, where tin' practice is most sensibly and injuriously 
 felt. If jirotecfion has any effect at ivll, it must be to attract capital and lalmi away 
 i'rom vtiprotettvd to ]»i}tt<tid iudustri(^s. So far, then, as this result is accomplished, 
 the nn)>rotect«'il imiustries are depleted of their main elements of siu'cess and ar« 
 allowed to lan^^nish. When the inevitable day of ov er-production arrivc+t in the«« 
 proUM'K'd branches, there is a de;siruction of the capital which protection has drawn 
 from it*i natural channels, and the laborer is sent abroad as "a tramp," or to seek 
 other kinds of occupation. Thus the et>'orts of Congress tu override the natural lawf* 
 of industry lead directly to crises and toe fienenil derangement of the social and induf- 
 trial systems. To be consistejit, {'ongrcHs should either protect »very inihistry iM^nally 
 or leave them all alike free, to be regulated by the natural laws. 
 
 41. But it nniy be argued that " frce-traile " Kngland has it+i jianics and it,s rri'^i, a* 
 well as "protecte<i"' America. Quite true she has, and for the same icasons. America. 
 her natural customer, whose breadstntfs and cotton she requires, refuses to exchuiigv* 
 with '"er a large ])art of the juodticts of her labor and cajtital. Kngland huH also, a* 
 I hav nhown, an artitieiallv and badly regulat^rd numetary and finantMal svstem, of 
 which the Hank <»f Kngland is the center or focus, a bank thi.t persists in treating its 
 own share of tlic note issue, founded on securities instead of cash, as good cash re- 
 serve, and has a traditional board of managers, wh<», because they can take these notes 
 lo the issue depiirtuient and Imy gold with them, fail to perceive the ditl'crcnoe Ite- 
 tween cash and crctlit. This is the luitural consequence of banks investing all their 
 paid-up capital in national securiti«'w, and relying on bonowed caj)ifal for a trading 
 margin. I wisli your coiufniltic to nuike a note of this impoTtant fact, for it cuts the 
 ground fi-om umler two ihousand luitional banks, as well .'W» of the Uank of Kngland. 
 If the plan is good in banking, why not extend it to all industries — the manufactur- 
 ers of engine**, cars, and rails, (or iuHtancef 
 
 i2. 1 have omitted to meet a plausible. I»ut most unfiumded pret,«>xt, set np by worrvj 
 Imnk doctriiiains, in favor of banks of is.><ne, until now. IL is that a itivjier curiency, 
 issued by the state. " is not a juoper commercial currency,'' because, forsooth, "it docH 
 not grow out oi" industry and production." See Mr. Sjaiil ling's ('ent^'imial A('dre>-s. 
 page 57. Th" Times, of this city, lately assert«'d, that, as paper money naturally 
 grows oat of commercial transacticuis, «mly banks i a'l keep the supply exactly equal 
 to the demand. The utter absurdity of such assertioa — reasouing it eanni t b i called — 
 appears from the self-evident proposition that patM" money, convertible into mefa). 
 whicb is the only sound pa^nr curiency, rt-st* on the ia« IaI, auJ, ao tbos* wbo u«e it 
 

 12 
 
 ill eoinnuirt-ial or ntli«M' l>ii.iiiu>HH, |iav the Name pricn for it ah tli<\v pay for intitalHv 
 ir/ioiifi.v, it followH iiH a logical dtinoiis' ration Mint a Ktato imhiu) xh jiiat. !!h much a com- 
 inen'ial curnMicy hh metal itMnlf. U.-inkMaro not tlHMlrimlieH, by divinorij^ht., tornfjulato 
 fn ;>plv and (i<-iiian(l. 't'lio wan m of liitt |i«'o|ilt>, who prt^ft4r ^(hmI papt-r nioiitiy to coin, 
 untl especially to tli»< siiort-weinlited nilvfi dollar, (lulermiiie the Hiipply of the more 
 eoiiveiiieiit tool, and not baukt* at all. Tliu (|nantity and amount of trailing power, 
 roHUikMiK from bills, are more within t)ie <-oiitri.: of bankH than iiion«'y which the} le- 
 :jeive o*i «I /posit and keejt on IdmkI to aec omniodate cuHtonierH. iiilH* of exchange cer- 
 tainly do "grow out of iiuliiHtry and production," but money, metallieor paper, never. 
 4U. I earmwtly hope your e«)inmitt«/e will H(!e Mie in-uropriefy of Congren«i att«4m))t- 
 ing to regulate the hours or the wages or jiric*, «)f the products of labor, all of which 
 belong to the name category. Finally, as far as the prest nt de[»res8ion in business is 
 concerned, Ooiigress should not, in my judgnient, attempt to interfere with tlie action 
 of the natural fiiWH, which are rapidly .netting the iiuinstrial nia<'hinery in motion 
 agaiii. What C«mgre8h can properly and iisefnlly do is to wit to work, a« I have be- 
 fore suggested, and fr«'« all industries lis fust as a <lue regard for vested legal abimes will 
 permit, without a too violent shock to society; and lirst, and most important of all, 
 abolish all banks of issue. A long and careful analysis of the operations of such 
 banks, commencing with the establishment of the Hank ot Kngland in 16D4, has led 
 ino U) the irresistible c(mclusion that nearly all the evils arising from banks in modern 
 times, and they have been enormous, have resulted from banks of issue ; and that 
 nearly all the advantag<>H, and they have been imiuenwi, have been due to banks of 
 deposit and discount. I therefi>re say abolish banks of issue, as such, in toto, and 
 amend the national banking laws so as to comjiel all joint-stock banks to organize 
 under them and report to a department the ccmdit ion of their ali'airs. Wlien some- 
 thing of this kind is done, and the National (Government ceiwes to ovenide the natural 
 laws of Ho«'iety, one great step will have been taken towards averting those destruc- 
 tive industrial cyclones, whicli are tin- etforis of natural causes to cure artiticially- 
 prodncied evils. 
 
 44. I had intended to have closed with the hist [laragraph, but, since it was written, 
 I notice great stn'ss is laid by ma:i\ "stump" oratois and sonu* more tlumghtfnl 
 rejisoners Oil the ctfect of the "destruction of property jintduced by a million of men 
 during the four years of the civil war." It is strenuously argued by many that the 
 panic of September, \HTA, eight years and a half after the. war, and f«>llowing seven 
 or eight years of great prosperity, \mis largely due to k .<;h destriu^tion ol property. 
 The same class also lay great, if not e(|iial stress on the inllation of the ]iaper cur- 
 rency. Now, a nioinent's relh^ctioii will Klii>w the absurdity of the position taken by 
 such reasoners. They argue, jpiitt! correctly, that bunk and currency inflation led to 
 over-prodiH'tion iin<l a general tall in the ]»ric(^sof labor and goorts. These gentlemen 
 are called on t(» exjdain how the xcnrvihi of labor and goods during the war, caused by 
 the destructive occupations of a million of men, could liavt^ i:iiluence in bringing 
 about a crisis at a time when the nlark(^t8 were glutted with laltor and production, 
 Btimulute<l by intlation. The twi» propositions seem to me to be wholly irreconcilable, 
 even on the theoiy of the Satyr, who blew hot and cold at the same time. 
 
 45. I will explain it for them. The ileatrueti<m of goods ami waste of labor are 
 represented by the national debt, and, to a large extent, have yet to \w. ]iaid for or 
 made good to society. We simply borix>wed \\w capital w hich has enabled us to bridge 
 over tlie chasm of wasted labor and destruction of goiwls and other prt)perty, and the 
 interest falls lightly on the national industries. As a nuitter of fact, proved by the 
 census of 1870, the withdrawal of a million of men for tour years from productive in- 
 dustry and their employment in dt-struction ')f proi)erty w.'w set ott' by the stininluB of 
 high ^trices (caused by the intlation of capital and valutas) on the productive onergieJ* 
 of those who remained. Abcuit 9.") ]>er cent, of all tlu'. products of labor are <lestined 
 to destruction by consumption within the year in wlii(di they are j)roduced and taken 
 to market. Hesides. tlios*) who lay so much strt^ss on the <lestruci ion of the war are 
 called on to prove that the siiridiis profit of labor and capital was lesi. during than 
 prior to and since t\w war. This will be a hard thing for any .statist ian to «lo. 
 
 NovKMin-.u If), 187H. 
 
 Since the foregoing com luunicat ion was wiittt'ii the resMJtsof the elec'tions in twenty- 
 nine States e,nable us to perceive m tst eh arly that the country will not tolerate an 
 inconvertible, inllated, and tliu tuating legal-tender paper currency. No leading man 
 possessed of conuiion. sense, will any longer follow the if/viit /a tuux of '' fiat money." That 
 question may be taken as settled, and as biding no long' r a disturbing element in na- 
 tiiuial politics. The mily one in respect t«> currency, is the substitution of national 
 for bank notes and the constitution of a " Money I)e[ jirttnent of State," wholly inde- 
 pendent of the Treasury and unconnected with banks. Until this is done the currency 
 question will continue to boa leading subject of agitation and contention. If it should 
 die out for a time, the next crisis — which is as certain to come in a few years as the 
 rising and setting of the sun, a'ul which will be produced, like »11 past crises, by hank 
 
13 
 
 JMnfis of paper Hiid inflation in bank .•anifal aiul .li8connl*-vvill ,aMw> a ronr^wRl nf 
 ^^M^ftlfJ'':'" *'".«'"'."'«'• »«>»« IHMi.Ml of iinancial enHmrraasinont, Zw i«Tho U„?e 
 to cut the coimoction lj«twe«n tl:« uaf n and the banks and to estab i^h L ili« of 
 
 'oto™ *''*'" "^*'''' payment but th«y cannot command ''a coriuJal-rg^ii" of 
 I have the honor to be Kcntlomon, yonr very obedient servant 
 
 'I-h. CON«U«S8,ON*. T.ABOR COMMm'KK. "' "''''''^'^'' '"^ '' '' ^^''^ ' 
 
 A