The Evolution Money ercy Kinnaird Nashville. Tenn, iii'ii.;. iiliiiii:;; I II llllillili tl|» 1 III -ii;j nil jiij! Ill iji II III iiiiii^^ iifiiii'iiii> The Evolution of Money By PERCY KINNAIRD, Nashville, Tenn. Book $i.oo Pamphlet - 50 MARSHALL & BRUCE CO. Nashville, Tcnn. KvOQ COPYRIGHT PERCY KINNAIHO CONTENTS. PAGE Introduction 5 Chapter I 11 Chapter II 21 Chapter III 32 Chapter IV 40 Chapter V 52 Chapter VI 67 Chapter VII 82 Chapter VIII 99 Chapter IX 112 Chapter X 122 Chapter XI 137 Chapter XII 14G (3) ^^tiuusa " IVe of this age are victims of men who fastened upon our forbears doctrines horn in the greed of power — the thirst for supremacy." — Gems of Thought. INTRODUCTION. hu M HE civic unrest from which humanity suffers has its causes, and, though the unrest is world-wide, intelligence has so far failed to detect the domi- nant cause, and expose its workings. There are paradoxes in the periods of unrest that fal- sify reason until the logic of the highest intelligence de- generates into mysticiism. Some of these paradoxes are the i3eriods when the peo- ple suffer from privation because nature has been so pro- lific in her returns to their labor that the horn of plenty is overflowing; others are the periods of good living and comfort, notwithstanding nature has not returned to their labor an average yield. The suffering in the one case may not be attributed to the scarcity of returns from labor, but has to be attributed to want, caused solely by inability to find emj^loyment that will earn the money necessary to purchase those things produced in excess for others. The comfort in the other is not so much due to labor as to the shortness in nature's yield, which preserves the opportunity to work, and earn the money necessary to preserve existence. In the one case we have the anomaly of overproduction being the cause of suffering to the point of starvation for some, because of the inability of many — who overlabored for tlie profit of others — to secure enough of the excess to preserve life, though the excess may be lying idle in the warehouses. In the other we have the anomaly of under-production being the cause of comparative comfort and good living, solely because scarcity of products has preserved the opi)ortunity to work and earn money. g IXTRODUCTION. We have the further auomaly of a civilization that forms goverumeut for the express purpose of securing to labor the enjoyment of its productions, being most im- potent in the years succeeding the years of its greatest efforts and largest excess of products. We have the auomaly of a Christian civilization that can give no relief to the starving except by the exercise of a so-called Christian charity, until the surplus pro- duced for others has been consumed by those only who can secure employment, and earn the necessary money. The over-production for a period of years, and under- consumption, or starvation, for succeeding years, is claimed to be one of the unavoidable incidents of this Christian civilization, for which there is no relief except the enlarged exercise of a more Christian charity. Therefore, under forms of government — organized by Christian civilization — deprivation to the point of starva- tion on the part of many — who over-labored until they produced an excess — must be endured for the benefit of those for whom they over-labored, until the excess can be profitably disposed of. As the excess is disposed of, and consumed, those who receive the profits, find it to be to their interest to gener- ously grant permission to the starving ones to resume work, until an excess above consumption is again accumu- lated. As the starving ones are reemployed, and use the money earned to purchase the excess, and subsequent produc- tions, consumption for a time keeps pace with production. This increases the price of products, and enables those who exercise charity — or furnish the money to others — to regain their contributions, and enlarge their wealth. We have, therefore, the paradox that charity is not altogether a Christian virtue, but in many respects a business investment ; for it is to the interest of those who work others for profit, to keep the workers alive during the time their labor mav not be utilized. ll^TRODVCTIOU. 7 It is evident from the foregoing, though in a state of nature man only enjoved such fruit of his labor as he was able to keep from his more powerful enemies, that there are manv periods — under a government of Christian civ- ilization — when he is deprived of the opportunity to labor; and if he continues to exist, it is as the recipient of charity. In a state of nature man must produce before he may consume; but in a government of Christian civilization he must ijroduce and distribute before he may consume. In a state of nature, man, therefore, is only concerned with the problems of production and consumption. As he, by diversity of occupation, processes to civiliza- tion, he more and more relies on distribution until a sys- tem of specialization is developed, when he is more de- pendent on distribution, and the opportunity to produce, than on his ability to produce. Man, therefore, in his ability to secure means to pre- serve his existence, has been dependent upon, and con- trolled by, the intelligence exhibited in the growth of the ever-changing devices first employed to aid production and consuinption, and subsequently employed to aid pro- duction, distribution, and consumption from the time he consumed only what he produced, to the time he con- sumes only that which others produce. In an analysis of the changes made — in the devices used — as man progressed from a being, compelled to sup- ply his wants by the personal production of everything he consumed, to the civilized person, compelled to supply his needs by the purchase of things produced by others, may be found the dominant cause that operates to create those inequalities and injustices which generate the present world-wide civic unrest. The present dominant necessity that man must have money with which to secure those things needed to pre- serve existence; and the equally dominant, but dependent, necessity that he must have em]»loymont to secure the 8 IXTRODUCTIOK. money, makes his existence depend more on the acquisi- tion of money than upon the God-given right to labor. From this it is evident that under this Christian civili- zation, man's God-given right to exist by the sweat of his face has been changed, until it is now dependent upon his opportunity to sell his labor for money. If man may no longer, in Christian governments, rely upon his labor to preserve his existence; if under the present system the many work for the few until they pro- duce an excess; and then have to starve until the excess may be consumed by those only whose labor can be profit- ably employed, is it not time to seriously consider the issue of money, its changes, nature, character, and inci- dents in the hope that there may be returned to man his God-given right to live by the sweat of his face, and cease making his existence depend upon the methods by which a special class issue money? The causes, therefore, that operate to create the civic unrest must be found in the method of procedure for the issue of money. Inasmuch as money is, and has ever been, the concrete expression of the changes in the growth of those devices, which have enabled man to form and sustain those gre- garious relations that diversity of occupations have de- veloped into the sj^cialization that is the civilization of today, it has so dominated his life that intelligence has failed to take the proper notice of the changes; and has also failed to correctly apprehend the nature, incidents, and character of money in the many changes it has under- gone in its growth, or evolution. It is realized that this is due : First. — To the fact that the changes have been 'psychical as icell as physical: and while the physical changes have been considered and provided for, no consideration has been given nor provision made for the psychical changes. Seconfl. — To the fact that the changes in the nature, character, and incidents of the devices, used as money. IXTRODUCTWy. 9 have beeu so taken advantage of to promote avaricious lust for power, that intelligence is held in the bondage of a financial mysticism that is criminal in its application to the practices of the people. The civic unrest that has beeu caused by the failure to take into consideration the i)sychic changes has at differ- ent periods been ameliorated by the physical changes that have been made, but none has stood the test of time ; and man}- have made conditions worse. Until the motives and causes that create conditions — known as civic unrest — are discovered, the changes — seek- ing relief — will not attain to the dignity of a science, but may only be known as the Doctrine of Expediency. The Doctrine of Expediency is an acknowledgment that relief sought by its aid is merely an experiment, without knowledge of the causes and motives that create the necessity for relief. So long as the motives and causes that create unwholesome conditions are hidden, changes seeking relief are tentative ; and, therefore, the exercise of power to compel the people to accept the change is justified on the ground that it may minimize, if not entirely cease, the evils. Some one expedient commends itself to the cupidity and ambitious lust for power of a class, especially when that class is given' the governmental power that protects and enlarges its interests, viz: the power to issue money. To dignify their use, and justify their retention, such expedients are called Working Theories. When a Working Theory has been sustained for a long time by the exercise of governmental power, the class that profits most from its operations contend that it is scientific, because, as claimed, it secures the best results of the many experiments that have been tried. Tn such cases it is almost imj)ossible to so ex])ose the causes and motives — which create the unwholesome con- ditions — as to induce intelligence to comprehend or ac- cept the exposition, for class makes it to the interest of 10 IXTRODUCTIoy. iutelligeuce to deu^- tlie evidence of the senses, and ques- tion tlie correctness of the purest logic — especially when the attack is made upon those Working Theories that enable class to live in the castles and palaces of the countries. Under the Doctrine of Expediency there is nothing left that may be done with any hope of relief, for all the physical changes have been made that the properties of the substances deemed fit to be used as money are suscept- ible of, and, therefore, if the correct theory for the issue of money, /. c. the Science of Finance, is ever to be discov- ered, it must be from an examination and consideration of the psychic changes that have, so steadily, if uncon- sciously, been going on in reference to the instruments used as money. The present work is intended to indicate the psj/chic changes that have taken place, and to show that they have been the necessary, if unconscious, growth of man's de- mands for serviceable instruments that would enable him to escape from savagery and barbarism to the Christian civilization that promises so much happiness and pros- perity. It is also intended to show that man does not enjoy that happiness and prosperity, solely because civilization neglects, and refuses to take notice of, or show any ap- preciation of, the psychic changes that have taken place in the growth of the devices, used as money; changes which were at first so essential as aids to production and consumption, and are now still more essential as aids to production, distribution, and consumption in the effort to preserve existence. THE EVOLUTION OF MONEY. CHxVPTEK I. OJS'EY has evolved from concrete objects of in- triusic worth, used as standards of value, to paper representatives of "words," originated to express the unit of value and its multiples and subdi- visions. Paper representatives of the "words" of value, when given the sovereign power of Legal Tender, are Standards of Payment, because they are representativas of "icords" that arc the standards of value. A designated amount of money may only be expressed by certain "words" that are the multiples and subdi- visions of the "word" that is the Unit of Value. The "word" that expresses the ''Unit of Value," and the "words" that express its multiples and its subdi visions, are the language of finance, /. e., the "words" of the "Money of Account." A'alue, according to Adam Smith, the greatest of the economic philosophers, has its source or origin in labor, and the "words" of value, or of the "Money of Account," according to Sir James StcAvart, the only financial scien- tist, must be expressions of labor ; and should, as he states, "Perform the same office with regard to the value of things, that degrees, minutes, and seconds do with regard to angles, or as scales do to geographic maps. . . ." Therefore, that which is meant by the use of the "word," money, is the latest manifestation of the evolution in the character, incidents, and quality of those instru- ments issued, as official reprasentatives of the "words" 12 THE EVOLUTION OF MONEY. of the Money of Account, to express the ideas of value, i, €., of labor, which the ''words'' are intended to convey, when their concrete representatives are used as the stand- ards of payment, though called standards of value. This evolution changed the use of tokens by the savages to the use of mediums of exchange by the barbarians; changed the use of mediums by the barbarians to the use of gold and silver, and their substitutes, by partly civilized man; changed the use of gold and silver, and their substitutes, by partly civilized man to the use of gold and its representatives, b}' a higher civilization; and is now changing the use of gold, and its representatives, to the exclusive use of official or legal tender paper repre- seutatiA'es of the ''words" of the ''Money of Account," for the betterment of the condition of all the people. This evolution is now changing man's idea that the standards of value are concrete objects of intrinsic worth to the realization that they are the ''words" of the "Money of Account," whose concrete representatives should only give expression to his concepts. These concepts are ideas of the relations that products bear to each other, considering only the number of labor units involved. The ideas may only be expressed by the ''words" of "the Money of Account," and, when the "words" are rei)re- sented l)y printed pieces of paper which bear the govern- mental power of Tender, they more stably, equitably, and expeditiously perform the service required of them than do coins of gold bearing that power. In his progress from the condition of a savage to that of a barbarian, and then to a civilized being, man has undergone a wonderful growth. This growth must be taken into consideration when the endeavor is made to ascertain what is money. The factor that has been most instrumental in advanc- ing man from a savage to a barbarian, and then to a partly civilized being, has been the use that he has made THE EVOLVTIOy OF J/OXEY. 13 of his faeiilties iu guidiug and coutrolliug his eft'orts to Ijreserve existence, and secure comfort and happiness. When man's efforts are so expended that they return the largest yield of those things essential to existence, they are under subjection to his highest and best faculties. The germ of civilization was necessarily diversity of occupations, which, as it widens until it becomes special- ization, is the highest civilization. Maximum returns to man's efforts may only be had by diversity of occupations, carried to the extremest limit of specialization. The more specialization, the greater necessity for exchanges. The greater the exchanges the higher the necessity for serviceable, efficient, conven- ient, and expeditious instruments for effecting the ex- changes. Whether man can progress from the condition of a savage, through barbarism to civilization, depends upon whether the primitive idea of diversity of occupations can be developed to that of specialization. If it cannot, progress ceases when the limit of man's capacity to diver- sify occupations has been reached. The civilization of those who have no limit to their capacity to specialize may be wholesome, or it may be foul. The quality of the civilization depends upon the character, incidents, and utility of the instruments that effect the exchanges, and which dominate and control all methods of procedure for the creation and distribution of ]»roducts. If the instruments, with which exchanges are effected, are operated in practice, and sustained in law, so as to secure a just return for the labor that created the products, the civilizati(m is wholesome. If the instru- ments are made to so operate, either in practice or in law, that the justice and equity of a fair return for the labor expended is not secured, then the civilization is foul. The savages responded to the demand that they should diversifv their pursuit of game in order that they might enjoy diversity of those things which preserved life, when 14 THE EVOLUTION OF MONEY. thej devised tokens which served their use in making ex- changes, as money serves our use today. The barbarians responded to the demand that they should enlarge the diversity of occupations in order that they might enjoj* that larger diversity of things which pre- served life, tickled the palate, and secured some addi- tional comforts when they enlarged the idea of tokens until they devised mediums of exchange which served their use, as money serves ours today. Man continued to respond to the demand for diversity of occupations, by the changes made in the things used as mediums, until gold and silver were finally selected as the substances best fitted for that purpose — when, it may be stated, the stage in his development was reached that is called tlie dawn of civilization. In practice the savage, the barbarian, and civilized man made similar use, respectively, of the tokens, the me- diums, and gold and silver; and they experienced similar advantages and disadvantages, Man has ever suftered from the inconvenience, the un- certainty, and instability of the use of those things with which he effected exchanges. This defect neither the savage, the barbarian, nor civilized man has ever been able to remedy — and humanity suffers from it today. The savage and the barbarian endeavored to secure certainty and stability in the use of their tokens and mediums, by the selection of those things regarded as so precious that they were willing to exchange anything they i)ossessed for them. So long as the things selected retained this regard, their use was certain and stable to a high degree of efficiency. But, as this regard changed — and it changed often and for many reasons — the tokens and mediums became so uncertain, and so unstable in use. that something else, which would secure the required cer- tainty and stability of use, was selected. That the inherent worth of the things selected was not the cause of their use, is evident from the consideration THE EVOLUTIOX OF MONEY. 15 that it made no diflereuce what was selected, nor how precious it may have been regarded, it invariably lost that regard in part, and something was selected which Avould more fully, and more stably, command the regard that the barbarian insisted the thing should have. What is the source or cause of this demand for a change of the mediums to something which has the in- trinsic worth that the barbarian always denuinded it should have ; and which demand has passed on to civilized man in growing force? Neither the tokens of the savage nor the mediums of the barbarian colisciously represented, in their use, ideas of the relations that the things exchanged bore to each other, considering the efforts expended in securing or in producing the things, for neither had any consciousness of such ideas — but it is unthinkable that subconsciou8ly this was not the cause of the demand for the many changes made in the things used as mediums. Neither the savage uor the barbarian considered the use of the tokens or the use of the mediums as one of the qualities that sustained their regard for them, and they have passed this error, unimpaired, on to civilized man ; but they supposed, and assumed — as does civilized man with his gold and silver coins — that the tokens and mediums were selected because of the inherent properties which caused them to be regarded as so precious. This idea of the worth of the inherent qualities of the things selected, being the cause of their selection, has dominated the savage, the barbarian, and civilized man, notwithstanding everything which has been selected, in- cluding gold and silver, lose in their assigned values, even when the worth of the inherent pro])erties is sustained by the demand for them as mediums of exchange. That the subconsciousness of the savage and ol' the barbarian, in determining an estimate of the worth of the things selected, had to be based upon unconscious ideas of the worth of their otloi-ts is metai»hysically true, 16 THE EVOLITWX OF MOyEY. thongli thej had no consciousness of it, and, therefore, the tokens and mediums reprasented their subconscious ideas of the efforts expended in securing, or in producing, the things to be exchanged; and, as they subconsciously com- jjared their efforts with their ideas of the efforts of others, who had things which they needed, they formed another set of subconscious ideas in reference to the relation their products bore to the products of the others, considering the efforts each had expended. The idea of this relation between products is subcon- sciously endeavored to be expressed by the selection of something regarded as the full equivalent of the effort expended on the product; and so long as the thing se- lected is regarded as the full equivalent of the effort ex- pended, and will be readily accepted in exchange, man was willing to continue his efforts, and exchange his sur- ])lus for the mediums. Tokens, mediums, and gold and silver have always represented ideas of the relation that the efforts of man — when crystal ized into products — bear to each other, as has often been demonstrated by the retention of the use of the idea, after the abandonment of the things selected to con- vey it: and it is not understood why the fallacy that the intrinsic quality of the medium determines and dominates its use is so generally accepted, when in practice its use always dominates, until hroufjlit under the suhjection of intrinsic-value hy force of the law. Inasmuch as the mediums were subconsciously used to express ideas of the relation of products to each other, and inasmuch as these ideas, and all other ideas, must have a means of communication to intelligence, it became necessary to devise a method. Words were, therefore, originated to name the products, and to name the things selected as tokens and mediums; and when those words were used, they conveyed ideas of the products, and ideas of what the tokens and mediums represented. The words that name the products are a part of what is known as the THE EVOLUTIOX OF IIOXEY. 17 language of a people. The words originated to express or convey the subcouscions ideas of the relation of products to each other, and which were used to name the tokens and mediums, are now known as "Money of Ac- count," or the language of finance. The language of finance is peculiar — in that to be serviceable and efficient in conveying ideas (for words only convey ideas) — it has to have a "word," known and regarded as the Unit, and other "words," known and re- garded as the multiples and subdivisions of that Unit. If some "word" was originated or, after it was origi- nated was selected, to name the Unit, and other wordiS were selected to name the multiples and subdivisions of the unit, is it not all-important to determine what the "word" is the unit of — since the thing it was used to name is regarded as the standard and measure of the worth of other things? The statesmen and the economists have stated it is the Unit of Value. The scientists have claimed it is the Unit of the "Money of Account." When the statesmen and economists have defined value they have failed to satisfy the intelligence of practical experience. They derived their idea that the unit was one of value from the savage and the barbarian. The savage and the barbarian, respectively', used tokens and mediums, as standards, and, therefore, as the measure of the worth of other things. Their estimate of the worth of the tokens, or of the mediums, was determined by the intensity and strength of their desire for them ; and things Avere ex- changed for them without taking into conscious considera- tion their efforts in securing or producing the things. While this is true, it is known — however strong may have been the desire of the savage for tlie tokens — they were often changed ; and since the savage had no con- sciousness of tlie subconscious working of his mind, the changes were attributed to his fitful fancies. 2 18 THE EVOLUTION OF BIONEY. Worth— or what is now known as value — was, there- fore, regarded as the concrete material thing, used as a token; and its Avorth, or A'alue, was assumed to be those inherent qualities which excited the savages' desire. In its last analysis, worth was the strength of that desire, and that which was chosen to represent that in- tensity^ of desire, was eudoAved Avith the desire, and would command all other things in exchange. This made a concretion of the saA^ages' desire; and the token, which represented and satisfied that desire, was to him worth, as gold and sih'er, in the opinion of today, are value. The barbarian regarded his mediums as the savage re- garded his tokens— not as a thing chosen to represent the strength of his desires, nor as symbolic of his ideas of Avorth — but as that which was worth; and therefore his idea of A^alue was the concrete thing AA'hich he used as a standard to measure the worth of all other things. The crudeness of exchanges made by the saA'age may not haA'e demanded the devising a Unit, but the stage to Avhich the barbarian had attained, developed a crude equity that demanded a Unit, and multiples and sub- divisions of the Unit. The idea of fairness in exchanges that developed numer- als, indicates that an idea of equity, hoAA'ever crude, was being aAvakened in the barbarian mind. This idea of equity indicates a desire, or determination, to secure a perfect equivalent of something, Avhen products were exchanged for mediums. The something, for which numerals were devised to secure an equivalent, could be nothing other than that AAhich was put into the product, and which made it so desirable that it could be readily exchanged for the mediums. Those things which made the product so desir- able that it Avould exchange for the mediums could be nothing other than those efforts of man, now known as labor, that shaped some of nature's products into forms THE EVOLUTION OF 2I0XEY. 19 of usefulness. Therefore, if the mediums had to be re- garded as Units, multiples, and subdivisions in order that an equivalent could be secured when products were ex- changed for them, they were mere representatives of the efforts of man. But the mediums had to have names, as did the products, and, as words were originated to name them, one was given to the Unit, and others to its mul- tiples and subdivisions. The *'word'' that was used to name the Unit was man's subconscious expression of his idea of the Unit of his efforts, and the thing which bore the name of the Unit Avas the concrete representative of his subconscious idea. If the value of the product must be determined by its utility, usefulness, or use should not that, which was em- ployed as its equivalent representative in effecting ex- changes, have relied for its value only upon its utility, usefulness, or use, and not upon its properties? Inasmuch, however, as the serviceable value of the me- diums dei>ended upon certain worth for the continuance of their acceptance at that time, it was imperative thai those things be choisen, which, by reason of the inherent worth with which they were generally regarded, would make their acceptance certain and stable. The barbarian was, therefore, compelled in his practices to consider the mediums as worth, for he had no other alternative. This made his idea of worth that has come doAvn to civilization as value — a concretion. If his subconsciousness that he used the mediums as the representatives of his ideas of the relation that products bore to each other, considering the efforts ex- pended in creating the products, had developed into con- sciousness, it could not have benefited him, for he could not liave escaped the demand that the mediums, to be serviceable, must be regarded as precious. Man, as a civilized being, using gold and silver as mediums, was for a long ])eriod under the same necessity of so regarding them, in order that he might secure the 20 THE EVOLUTIONS' OF MONEY. certainty and stability in use that is so essential ; but in practice he has abandoned that idea, though it is re- tained in theory and enforced in law, until it creates jianics. In his practices civilized man has been finally com- pelled to giye expression to the conclusion of his subcon- sciousness that money is, and should only be, issued to conyey ideas of the relation products bear to each other, considering only the efforts expended in creating the products. Therefore, paper currency and paper credits, which haye no intrinsic worth, but are mere representa- tiyes of the "words" that conyey these ideas of relation, conduct 97 per cent of the yolunie of business, and in the higher financial centers 99^ per cent; and there is now little use of silver, and less of gold, in the actual conduct of business. This change from the use of gold and silver to the use of paper in the conduct of business is irresistible; has taken the legal tender quality from silver, and has lim- ited the use of gold and its representatives to the conduct of 3 per cent and less of the volume. The reason for this change, and its irresistible trend, when properly understood, will explain the contention that money is completing its evolution from concrete sil- ver and gold coins, as standards of values, to mere legal tender paper representatives which express ideas of labor units, as standards of payment — becaui«;e they are repre- sentatives of "words" that are the standards of value. CHAPTER II. M HE change from the use of tokens by the savages to the use of mediums by the barbarians; from the use of mediums by the barbarians to the use of gold and silver by civilized man ; and the change to the exclusive use of gold, was made upon the assumption that the issue of money was a mechanical art, and, therefore, a private right, even after gold and silver coins had to be given the exclusive right to the power of legal tender to make them efficient as standards of valiieT The change from the use of gold coin, as concrete standards of value, to the use of paper credits, as representatives of man's con- cepts of the relation of products to each other, is an evo- lution which has progressed so far in the practices of the people that it must receive intelligent recognition in the policies and laws of government, if revolution is to be averted. The mind of man is noAv consciously measuring the worth of things, as it has heretofore done subconsciously ; and concrete intrinsic value standards have not been es- 1 sential since the power of goyernmentaI_ tender was \ evolved to force certaint}' and sta])ility in the use of the ) standards of payment. These are not idle speculations, but an exposition of the practices of the people that have never received any legal recognition, thougli they have, in a sense, been j)ointed out by some of the economists, some of the scien- tists, some of the statesmen, and accepted by a few '^jurists^ ^ long as gold and silver were exclusively used in ef- 22 THE EVOLVTIOy OF MONEY. fecting exchanges, the demand for them to perform such service preserved their value. Man's progrests in civilization was, therefore, confined to the exchanges that could be effected by the use of gold and silver; and there was no question as to their being the best standards, so long as certainty, and stability of their use dejiended upon intrinsi c wort h. But it was early in the history of the race^decided that the civiliza- tion of that portion of mankind which had the capacity to diversify occupations to the point of specializa- tion, was not to be confined to the civilization that could arise from exchanges made only by the exclusive use of gold and silver. As man arrived at the stage of civilization where gold and silver would not conduct the exchanges necessary to his further progress, and which he could only promote by greater diversity of occupations, he devised methods — in addition to the use of gold and silver — for the conduct of business. In the invention of devices by the people to assist or supersede the use of gold and silver in their practices, the highest order of genius has been shown. In the policies and principles of government that regu- late the use of these devices may be seen the stupidity, cupidity, and ruthless ignorance of the barbarian. The history of the origin of these devices may be stated as follows : In some localities little or none of the metals could be retained, and the people having once been served by their use, refused to substitute anything in their stead ; or, being under the power of some form of government, were not permitted to do so, and their occupations being too diversified to efficiently permit exchanges by barter, they resorted to the use of oral credits, or verbal promises. Verbal promises, or oral credits, could not be safely assigned or transferred, and, as the liquidation of verbal credits was as essential then as is the liquidation of paper credits now, there was devised a method of set- THE EVOLUTION OF MONEY. 23 tlement that was the germ of bauks of deposit, discount, exchange and issue, where settlements are made today. The method devised was weekly or monthly fairs, where all the people assembled to trade, and, at the same time, swap or adjust their oral debts and credits, until there was as near a settlement as could be reached by such a method. In the course of time there was developed those who specially attended to the adjustment of the credits and debts of others, and as brokers of those credits and debits, they were the progenitors of banks of credit. The oral method of conducting exchanges — as it was assisted b}^ such gold and silver as could be secured — con- tinued until the art of writing was discovered, when it was enlarged by the use of bank-credits. The scarcit}' of gold and silver, and the loss from abra- sion, sweating, land and sea thieves made the use of the metals .so unsatisfactory, and so hazardous, that it became essential to devise a method whereby a safe deposit of the metals could be made and a credit received which could be used as a substitute. This was done by the system of mediaeval banks originated to hold the deposits, and pro- vide for the use of the credits. The banks, therefore, received the gold and silver of the people, gave them a credit upon books kept for that purpose, with the right to transfer any part of it by ap- pearance at the bank, and agreement to and acceptance of the transfer. These credits were based upon the gold and silver in the banks ; and in the use made of them to etfect exchanges, served as the substitutes of gold and silver. Since they were based upon the metals, the value of their service, i. e., their "use-value," was the same as the value of the service, or the so-called intrinsic-value, of the gold and silver they represented, so long as the metals were kept in the banks. The use of the credits was so much safer than the use of the gold and silver, that they met with general favor, and the banks multiplied. 24 THE EVOLUTION OF MONEY. The chief necessity of tlie people was a suflQcieut num- ber of mediums of exchange; and since the civilization of that period had not developed either printing, paper, or the idea of the govenimcnt conipelling printed pieces of paper to serve as solvents of debts, it was necessary to secure certainty, and stability of service, by basing it, as in the case of bank-credits, upon gold and silver. This must be the origin of the idea that paj)er currency should have no ^'use-value," unless it is based upon, or redeemable in, intrinsic-value metal. The safer, more efficient, and more expeditious use of the bank-credits, than could be made of the gold and silver, was highly appreciated; but though the enlarged and more efficient use, i. e., service, of the bank-credits added to the value of the metals, that service was never regarded as any part of the value of gold and silver. The Bank of Amsterdam was a remarkable illustration of this fallacy, and demonstrated in its experience that when credits are compelled — by the force of opinion or of law — to rely upon the properties of gold and silver, and not upon the power of "Tender," for the value of their service, or their ''use-value," it is an error that is criminal in its results. The gold and silver was deposited in the Bank of Am- sterdam under the agreement that it was never to be withdrawn, and that the metals were to be forever kept in the vaults of the bank to preserve the value of the use, or the ''use-value," of bank-credits. The custodians of the deposits, /. e.. Bank Managers, were to be elected by the people of the city every two years. For one hundred years deposits were made by the people, and safely kept in the vaults. During this period the i^eople prospered beyond what they could have done by the use of gold and silver. When the bank had been in operation one hundred years, the yield of the precious metals ceased, or for some other reason the people were unable to secure a quantity sufficient to furnish the additional bank-credits needed to THE EVOLlTIOy OF MOUSEY. 25 conduct tlie increasiug volume of business, and preserve the progress of tlieir civilization. There is one peculiar thing about civilization. It will not remain stationary. It either advances or recedes. It will not advance unless the volume of business en- larges ; the volume of business cannot enlarge unless more exchanges are effected, and more exchanges cannot be made unless the mediums, with which the exchanges are effected, are increased. Therefore the prosperity and Avel- fare of the people of Amsterdam, and the surrounding country, depended upon the increase of the bank-credits. The credits could not be increased Avithout additional gold and silver, and additional gold and silver might not be had, for the available supply was in the vaults. The intelligence of that civilization was presented with the necessity of doing something to preserve its pros- perity. Under the intrinsic-value theory the deposits could not be removed from the vaults, and placed in circulation again so that it might be used to secure additional credits, for the removal of the deposits would destroy the value of the use, or the "use-value'' of all the credits. There were two ways in which the deposits might be used to enlarge the credits, and save the declining pros- pei'ity : One was honest — the other dishonest, and a crime against humanity — but both justified by the same motive, i. e., the desire to preserve the happiness and prosperity of the people. The dei)osits might have been secretly re- moved, and so judiciously used in the i)ayment of public debt, making i)ub]ic improvements, and otherwise so ex- l^ended for the general welfare of all the people that when the secret became known, they would have been Avilling to deposit more gold and silver to be similarly used, ])ro- vided the government would make the bank-credits receiv- able, or a full tender, in the payment of debt. That would have been in its motives, its actions, and its results, an honest and beneficial, though secret, re- 26 TEE EVOLUTION OF MONEY. moval of the deposits, even under the intrinsic-value sys- tem. The other way would have been for the managers to secretly remove the deposits, or so much as might be necessary to secure the needed credits, and expend them in their own personal interest in the hope that they could thereby the better preserve the secret, and preserve the '^use-value" of the bank credits, but it would have been theft, however much it might have benefited the people. In one case it would have been a wise, judicious, and honest expenditure of the deposits in the equal interest of all the people; and if only enough of the deposits had been removed to supply the additional bank-credits needed it would have preserved the ''use-value" of all the bank- credits, while demonstrating the fallacy of the intrinsic- value system. In the other case it would be robbery of the people, be- cause, however pure the motives in secretly removing the deposits, and however much it may have, at first, enured to the benefit of the people, the fact that it was to be ex- pended in the personal interest of the managers of the bank would arouse those passions of avarice which would cause them to lose all consideration for the welfare of the people, and degenerate into thieves who would steal every- thing they could lay their hands upon. The history of the bank is that the managers not only secretly removed enough of the deposits to secure all the additional credits needed to ensure the continued pros- perity of the people, but they stole the accumulated de- posits of a hundred years, and preserved the secret. They lost all regard for the welfare of the people, and for fifty subsequent years continued to steal the deposits — preserving the secret — until they had caused such an immense number of credits to be entered upon the books that they became so cheap it was to the interest of the thieves to expose the secret and destroy their use alto- gether. THE EVOLUTIOy OF MOyEY. 27 The Bank of Venice was a still stronger illustration of the fallacy of intrinsic-value; and the efficient and safe use made of the credits of that institution demonstrates the truth of the contention that it is the value of the use, and not the inherent value of tlie thing tchich serves the use, that dominates, as standards, in the conduct of busi- ness. The experience of this bank demonstrates, in its prac- tices, that when gold and silver were separated from their use, as money, the separate and naked use of the bank- credits was more efficient, more stable, and more valuable than gold and silver; and when the bank-credits and the gold and silver coins were jointly used, the use, /. e., serv- ice, of the bank-credits was more valuable than the com- bined inherent worth of the metals, and any use, /. e,, service, that could be made of them. This demonstration in practice of the dominance of the separate and indeijend- ent use of the bank-credits was due to that scientific use of the legal tender, or sovereign power, always displayed when it is necessary for a people to preserve their liberty. The Eepublic of Venice, a wealthy commercial city, but as weak in warlike defense as it was strong commercially, was threatened by formidable enemies; and if successful defense was made, it could only be done by the Free Com- panies which infested Europe at that time, and sold their services to the highest bidders. The necessary funds were raised by the organization of the Bank of Venice. All the wealthy citizens were forced to lend their precious metals, jewels and valua])les to the bank, receiving in exchange only an interest-bearing credit on the books of the bank. The deposits were not to be held in the bank to secure the value of the use, or the ''use-value" of the credits, but they were to be employed to purchase the assistance of the Free Companies to defend the "Republic. Permission was given the people to use the bank-credits in the conduct of their business ; and to make their service efficient, it was provided that transfer of the credits might 28 THE EVOLUTION OF MONEY. be made to each other upon the books of the bank in any amount, however small. The service the bank-credits might render depended upon the patriotism of the people, the hope that the interest would be paid yearly, and the credits some time in the future; and did not — as in the case of the Bank of Amsterdam — depend upon the gold and silver in the vaults, for it was paid out. The use that the people made of the bank-credits — though only permissive — was so much more valuable than gold and silver, or any use that could be made of them, that the credits commanded a premium over the coins of those metals. The use made of the credits was so inces- sant that in the course of time the people ceased to collect the interest; and as the credits commanded a premium over gold and silver coins, there was no demand for their redemption. The question of the payment of the bank-credits was never raised, but, on the contrary, the government passed laws to reduce the premium. The bank was organized in the eleA'enth century, and when, in the fourteenth century, it was realized that the people had long since ceased to collect the interest on the bank-credits ; that the u^se of the credits was more valuable than the gold and silver coins; and that the government would not be allowed to pay the bank-credits so long as it j)ermitted the people to use them in the conduct of busi- ness, the conclusion was forced upon the officers of the government, and the managers of the bank, that the value of the naked use, /. e., service, of the credits had been such, that in practice, in law, and in theory the debt had been paid, // the continuance of the use of the credits to liquidate debt was permitted. As this conclusion asserted itself, the value of the use of the credits was fully appreciated, and taken advantage of to increase the receipts of the government, decrease the jiremiums of the bank-credits, and automatically furnish TEE EVOLUTION OF MONEY. 29 the people with safe, stable, and efficieut instruments to effect their ever-increasing volnnie of exchanges. This was accomplished b}' a law in the fourteenth cen turv, which gave certain coins of gold and silver the ex- clusive right to purchase additional credits from the bank; and to sustain and support the "use-value" of all the credits, the law provided that the bank-credits should have the exclusive right to pay all debts in the larger, or wholesale, transactions. The use of the credits from the eleventh to the four- teenth century — though only permissive — had shown an efficiency that liquidated the debt; made the credits more valuable than the the gold and silver coins, and Venice the commercial mistress of the world, and, there- fore, their use would not be affected by the increase of the volume of their issue, if they were given the exclusive right of tender in the payment of all debts in the larger or wholesale business ; and certainly not, when the pur- chase of the additional credits was limited to certain coins. The limitation of the right to purchase the credits to certain coins, enabled the bank to control the volume of credits; and the right must have been wisely confined to certain Venetian coins, for the history of the bank to 1792 — when it was destroyed by Napoleon — shows, with but few exceptions, the credits commanded a premium over the coins. The use of the credits of the Bank of Amsterdam had been highly beneficial to those people for 150 years, and they could well afford to pay the price exacted — in the theft of their deposits — if the custodians had so judi- ciously stolen the deposits as to have preserved the value of the use of the credits to the i)eople; but the reckless- ness and ruthlessness of the ignorant avarice, which stole and used the deposits, was such it operated to destroy the "use-value" of all the credits. The crime committed against those people was the destruction of the "use- value" of the bank-credits — whicli was caused bv the 30 THE EVOLUTION OF 2I0NEY. theft of the metal upon which the credits were erroneously based. This crime, in varying forms of disguised dishon- esty, has since been often committed, and will continue to be committed >so long as the intrinsic-value system is re- tained in the policies of governments, and enforced upon the practices of the people. In the case of the Bank of Venice the deposits were not stolen, but expended in defraying the expenses of the gov- ernment; and the use of the credits was not destroyed, but made more elHcient, more serviceable, and more val- uable than the gold and silver coins. The advantage that accrued to the people of Venice, over and above that which accrued to the people of the City of Amsterdam in the use of similar bank-credits, was solely due to the adoption by the Eepublic of Venice of the "use-value" theory of issuing money, instead of the intrinsic-value theory adopted by the Bank of Amster- dam; and the only difference between the two systems was in the methods by which the service of the bank- credits were made efficient, valuable, and stable. The credits of the Bank of Amsterdam were made cer- tain and stable in use by the retention of the gold and silver in the vaults of the bank, which is the essential re- quirement of the intrinsic-value system. The use of the credits of the Bank of Venice were made certain and stable only by the faith that the interest on the debt would be promptly met; by the faith that the debt would be eventually paid, and by the singular permission, and provision, in the beginning, that the credits might be used in the conduct of their business, and, subsequently, by giving them the exclusive right to pay all obligations in the wholesale or larger business. This method of using the bank-credits as a local cur- rency, while gold and silver were dissipated in paying for the defense of the country, was a device that depended for its success upon the patriotism of the people, and the legal tender power, and is the "'use-value'' system. THE EVOLUTION OF AIONEY. 31 To the extent that the bank-credits exercised the ex- clusive right to pay debts, the practice was a contribu- tion to the Science of Finance, for it was a substitution of the ''use-value'' for the intrinsic-value theory — a substi- tution which must be made by this government to con- form its policies to the practices of the people. CHAPTER III ITH the exception of the seemingly abnormal practices originated by the necessities which demanded the organization of the Bank of Venice, there was no additional infringement upon the in- trinsic-value system by the "use-value" practices of the people. The art of writing had enabled the people to make many of their exchanges by the use of notes, drafts, bills payable, warehouse receipts, acceptances, bills of lading, and other devices employed, and their use, though cum- brous and in many cases unsatisfactory, had enlarged the volume of business. The progress of the people was dependent upon the number of their exchanges ; the number of their exchanges was dependent upon the efficiency of the written devices; the efficiency of the devices was dependent upon their prompt settlement, adjustment and payment, and it was, therefore, necessary to use gold, silver, and the bank- credits to ensure the settlement of those written devices that would not be accepted in liquidation of debt. Since it was not known which written devices would, and which would not, be received as liquidators of obligations, it was arranged for all of them to be payable in gold and silver, so that when any of them became worthless demand could be made that they be so paid. The bank-credits, as substitutes for gold and silver, having demonstrated that they could be used to settle, adjust, and pay a much larger amount of the written obli- gations than could be done by the use of gold and silver, I lie metals were more and more used as a base for bank- credits. As the supply of gold and silver increased, the bank- THE EVOLUTION OF MONEY. 33 credits increased, until tliey finalh', in great part, super- seded the use of coins in the practices of the people. This diversified occupations, exjjedited exchanges, and enlarged the volume of business, until it produced the civilization that developed printing, and the manufacture of paper. With the use of writing, printing, and paper the people were enabled to originate such a variety of devices for effecting exchanges, and they issued them in such number in conducting the increasing volume of busiuess, that gold and silver could not be found in sufficient quantity to sup- port the bank-credits necessary to promptly settle, adjust, and pay the obligations. Civilization was not to be stopped in its onward march by a scarcity of gold, silver, and bank-credits, and addi- tional devices had to be developed to supply the necessary instruments to settle, adjust, and jjay the many and varied obligations issued by the people in effecting their increasing exchanges. The device now adopted was the expansion of banks-of- credit into banks of deposit, discount, and exchange with authority to issue notes based upon gold and silver — to be used as the credits had been used. The change from the use of credits to the use of notes was for the purpose of increasing the instruments used to settle, adjust, or pay the obligations not otherwise liquidated. The number of instruments could not be in- creased under the intrinsic-value theory, if, like the credits, the noteis were issued only in equal amounts of "use-value" with the value of the gold and silver on which they were based. Therefore, it Avas necessary to authorize the banks to issue three, or more, times as much "use-value"' in notes as the value of the gold and silver held in the banks. A note, therefore, represented only one-third, or less,- of the value of the metal in the l^ank on which it was is- sued; and yet each note was intended to represent, in its use, /. c. service, the full value of the gold or silver coin on which the three or more notes were issued; but when the 8 34 THE EVOLl'TIOX OF MOyEY. same amount of gold, or silver, was in circulation, liqui- dating the obligations of the people, its "use-value" was only equal to the "use-value'' of one of the three or more notes which had been issued on an equal amount of gold or silver in the bank. As an economic consequence gold and silver disai^peared from circulation, and were only used to support the "use-value" of notes, and for com- modity imrposes. Having surrendered their use, as money, to the bank notes, gold and silver had to rely upon their commodity properties, and the demand for them as supporters of bank-notes, for any value they might have. As long as gold and silver were so scarce that the sup- ply would not meet the demand to support bank-notes, they retained their assigned, which is claimed to be their intrinsic, value because their use to support bank-notes gave them a larger service, /. c. a higher value, than all other uses to which they could be put. But after the supply more than met the demand to support bank-notes, the surplus was compelled to rely upon its commodity purposes for its value; and if the demand did not keep the value of the surplus equal ta the value of the metal in the banks, as it was represented by the "use-value" of the notes, it receded in value, until its n\(x ])er cent of the volume of business ; and in the higher financial centers, either honesty or sagacity, or the two combined, is such that official substitutes are not used to conduct but one- half of one per cent of the volume, ev^en imder the intrinsic-value system. When governments were first called upon to do that for 389032 38 THE EVOLUTION OF MONEY. the people which the individual could uo longer do, viz: furnish safe, sane, and sound instruments to be used in the settlement of the obligations of the people, it was perhaps natural and proper that gold and silver (consid- ering their use for so long a time, and that they had only lost their value by the loss of that use ) , should be given the exclusive right to the legal-tender power. But even after they were given this right, they were so cumbrous and so scarce, they could not be made to efficiently sen'e the use, and had to be given the additional right to issue palmer representatives. to act as substitutes for them. The paper obligations of the people, as they liquidated each other on the books of account, proved so much more equitable, efficient, and expeditious than the paper repre- sentatives of gold and silver, that the demand for gold, silver, and their paper representatives — bank-notes — was decreased — until they were only used in the conduct of the cash system, to settle the balances in the bookkeeping or credit system of conducting business, and as substi- tutes for the credits of the people, when they had lost their "use-value." The two combined, /. e,. gold and silver, and their bank- notes, do not conduct 3 per cent of the volume of busi- ness; and their use would grow less, if the dishonesty and avarice of those who control their issue could be elim- inated under the intrinsic-value system. The change from the use of gold and silver, as mediums of exchange, to bank-credits, as substitutes for gold and silver; from the use of bank-credits, as substitutes of gold and silver, to bank-notes, as representatives of gold and silver; from bank-notes, as representatives of gold and silver, to the use of the written obligations of the j)eople, until the intrinsic-value of gold and silver receded below the "■use-value" of the bank-notes, and they became uncer- tain as standards, has long since been accomplished. The change from the use of the uncertain and unstable intrinsic-value gold and silver, to the use of gold and TEE EVOLUTION OF MONEY. 39 silver, impressed with the legal-tender power to ensure their acceptance, as standards; the change from the legal tender gold and silver coins, and their representatives, bank-notes, to the paper credits of the people, until those credits conduct 97 per cent and more of the volume of business; and the periodic demand that the solvent, as well as insolvent, obligations of the people be paid in the legal-tender coins, or bank-notes, with its resultant panics has not been without its impress upon the thought of the centuries, though it has met with scant recognition in the principles of government. The incessant and irresistible tendency of the people to solve all situations and conditions that confront them in the conduct of their business, has caused them to ignore the erroneous theories of the government ; and though the general prosperity has been advanced, the legal applica- tion of the erroneous principles to their practices, at re- curring periods, has taken from the many to give to the few, until we have the foulest of civilizations. CHAPTER IV. NTELLIGENCE has been endeavoring for a cen- tury to analyze this change from the use of concrete intrinsic-value objects, as standards of value, and, therefore, standards of payment, to the use of paper representatives of the "words of the Money of Account" which, though they have no intrinsic-value, are used in practice, if not in law, as the standards of pay- ment. The idea that value was a concretion, and might only be implied in the physical properties of gold and silver, has always obtained. The idea that value might be the number of units of labor involved, and when a man priced the result of his labor that he subconsciously stated his estimate of the number of labor units he had expended, has never been realized, or, if realized, has never been acknowledged. The idea that value was, or could be, anything other than gold and silver, and that the value of other things could be anything other than the amount of gold and silver they would exchange for, has never been admitted, and seems to be incomprehensible to financial intelli- gence. The idea that value is a concept, and that "words," used to expreiss those concepts, convey only ideas of man's judgment as to the number of units of labor involved; and when things are exchanged, they are, and can be, justly exchanged only by a comparison of and agreement as to the number of labor units expended on each, is metaphysically, economically, and scientifically true. When products are offered in exchange it is necessary to determine and agree as to the number of labor units in THE EYOLUTIOy OF MONEY. 41 each, before the relation between the products can be ascertained — and this relation is determined so soon as there is mutual agreement as to the price of the products. If the units of labor in one are 5 and in the other 10, it is expressed by the statement that one is worth five dollars and the other is worth ten dollars. The relation of the products to each other, therefore, is the relation of five dollars to ten dollars, or the relation of five units of labor to ten units of labor. Value, therefore, may be defined as the relation of products to each other, considering only the agreed units of labor expended in creating the products; and the "words" used to express these relations are words of value ; or words of finance. When paper representatives of these ''words'' are given the power of governmental tender to compel their acceptance, as true representatives of labor units, they are on equality of value with the obligations of the peo- ple, which are issued as the agreed representatives of the number of labor-units expended in creating the products. The conduct of business is carried on by the obligations issued in making the exchanges ; the use of these obliga- tions is made serviceable and efficient by the arrangement that when any of them become suspected of being worth- less, and lose their "use-value," official substitutes must be used in their stead ; and in order that the substitutes may efficiently serve the use, they are given the quality of tender. This makes them serve as full solvents of debt, but the bank-notes — though they are representatives of gold and silver — are not given the quality of tender; and if they are accepted, as solvents of debt, it is because of the belief that those who issued them will rede.em them with legal tenders, /. c, gold and silver coins. If, in the last analysis, the paper credits of the people are only valuable in their use to the extent they will com- mand bank-notes, and the bank-notes are only valuable in their use so long as they will be redeemed with legal ten- 42 THE EVOLUTION OF MONEY. ders, then the "■use-value" of the tivo — however many may be actively engaged in conducting business — can, by a general demand for the payment of both in legal-tenders, be made ecjual to only the "use-value/' of the fetv coins in circulation. A general demand for the payment of the paper credits that conduct 97 per cent of the volume of business, in the legal tender coins and bank-notes that conduct only 3 per cent, causes a panic whenever made; for it reduces the value of the use, or the "use-value" of the many credits to an equality with the value of the use, or the "use-value" of the comparatively few coins and bank-notes. The value of the increased demand for the few legal tender coins, and their representatives — bank-notes — to I)erform the additional service that the credits of the peo- ple perform, and conduct the entire volume of business, is ignorantly and fatuously assumed to be intrinsic-value. Therefore, under such conditions, the law of tender changes value, in the practices of the people, from the labor, or "use value,'' of the many paper representa- tives of "words," issued in the conduct of their business, to the worth or value of the use of the few coins, and bank-notes, that cannot be made to conduct the volume of business. The impossibility of the few coins and bank-notes per- forming the service, and the necessity that the service should be performed, exaggerates their value, until it is an injustice to compel the payment of the obligations of the people in coins and bank-notes, or their equivalent. In the practices of the people, value, therefore, is an abstraction, for their obligations are mere paper repre- sentatives of "words" that indicate the number of labor- units involved. In law value is a concretion, /. e.. gold and silver coins ; and any effort to define an abstraction and a concretion, as one and the same thing, is absurd. All exchanges are contracts — in fact, man, as a civil- THE EVOLUTIOy OF MONEY. 43 ized being, has his existence by means of contractual rela- tions. When contracts are properly understood, it may be seen that all the governmental, if not economic, evils from which humanity suffers arise from the criminal ap- plication of intrinsic-value law to ''use-value" practices. When two persons want to effect an exchange of their surplus products they cannot arrive at an understanding until both agree as to the 'value of the product of each; and when they have agreed as to that, they have agreed as to the relation the products bear to each other, and the exchange is comi)leted in accordance with that relation. If it is mutually agreed that the product of one is worth five hundred dollars, and the product of the other is worth one thousand dollars, and they make the ex- change at these valuations, it is a subconscious under- standing that the products bear the relation to each other that 500 units of labor bear to 1,000 units of labor. Since the exchange would not be equitable, the one who has only expended 500 units of labor must give the other his product, and that which will command 500 units of labor. This may be done either by giving him 500 dollars in coin, or in bank-notes ; and when they are given and re- ceived it is with the subconscious understanding on the part of both that the 500 dollars of coins, or the 500 dol- lars of bank-notes, will command 500 units of labor, or its equivalent, whenever it is needed. This may also be done either by giving his note for 500 dollars, or the note of some one else for that amount prop- erly transferred ; and when the note is given and re- ceived, it is with the subconscious understanding on the part of both that the note will, in the value of its use or in its ''use-value," serve as 500 units of labor until it is due, when it will command 500 dollars. The contract is that the one is to furnish tlie oilier with 500 units of labor, when he agrees to pay him 500 dollars; and this contract is equitably performed by the use of the note to liquidate debt, which use it generally serves unless 44 THE EVOLUTION OF MONEY. there is an unnecessary partial, or general, demand for the payment of the obligations of the people in legal tender coins and bank-notes. The demand that paper representatives of units of labor, which, when issued are intended to be liquidated with other and equal paper representatives of units of labor, shall, by a partial or geueral demand, be made payable in coin, or bank-notes — when there are not enough to serve the enlarged use — makes the demand for the coins and bank-notes so large and so intense that it unduly enhances — not the value of the properties of the metal in the coins — but the value of the use of the coins. When settlement is forced by the law in legal tender coins and bank-notes, or their equivalent in value, it takes property to the extent of a thousand, and more, units of labor to liquidate the 500 units of labor; and in the endeavor to make the exchange, the one who executed the note has lost, and the other who received the note has gained what the one lost. Three wrongs are committed against the people in the enforcement of all such contracts. Their government gives to the class that owns the gold and silver : 1. A monopoly of the right to all the benefits that necessarily, and which can be made to, accrue from the exercise of its Sovereign Tender power. 2. It gives to that class — at any time its members see proper to exercise it — the additional right to demand the payment of all obligations — good or worthless — in gold and silver coin, or their bank-note representatives, though it is well known that it is an impossibility; for the many obligations issued to conduct 97 per cent of the volume of business cannot — and were never intended to — be paid with the few coins and bank-notes that are only needed, and issued in sufficient numbers, to conduct 3 per cent of the volume. 3. It gives to that same class the use of the power TEE EVOLUTION OF J/O-TET. 45 of its courts to compel the people to do the impossible; or to suffer the loss that is inevitable, when their prop- erty is sold to satisfy their labor-value obligations in legal-tender coins, or their equivalent — after the legal- tender coins have been enhanced in service-value, as they are, by the unnecessary, enlarged, and criminal demand for them. In theory these conclusions have been fully set forth by the best financial and economic thought of the centuries, but the fetish-worship of the purest intellects for the precious metals would not permit them to realize that the service of anything could be value, and used as the standard for the measurement of other things, except the service of gold and silver coin. In the latter part of the seventeenth century Sir James Stewart claimed that the "words," which are known as the language of finance, might more properly be termed the "Money of Account." He writes : ''Money which I call 'Monej' of Account' is no more than a scale of equal parts, invented for measuring the respective value of things vendible. 'Money of Account' is, therefore, quite a different thing from money coin, and might exist although there were no such thing in the world as any substance which could become an adequate and proportional equivalent for every commodity. " 'Mone}^ of Account' performs the same office, with regard to the value of things, that degrees, minutes, sec- onds, etc., do with regard to angles, or as scales do to geographical maps, to plans of any kind — in all these inventions there is some denominative taken for the unit. ''In angles, it is the degree; in geography, it is the mile; in plans, foot, yard; in money, it is the pound, livre, florin, etc. The degree has no determinate length, so neither has that jtart of the scale upon the plans or maps which mark the Unit; the usefulness of all these things being solely confined to the marking of proportions. Just so, the Unit in money can have no invariable determinate 46 THE EVOLL'TIoy OF MOyEY. proportion to any part of value; that is to sav, it cannot be fixed in jierpctiiitij to any ixtrticiilar quantity of gold or silver, or any other com mod it y. "^The value of commodities depending upon circum- stances relative to themselves, their value ought to be considered as changiug with respect to one another only ; consequently, anything which troubles or perplexes the ascertaining these changes of proportion by the means of the general determining and invariable scale, must be hurtful to trade; and this is the infallible consequence of every vice in the policy of money or coin. "Money — by which we intend coins of gold or silver — is neither a standard of value, a measure of value, nor a representative of value. "The precious metals are commodities of value, and do not, of course, lose that quality, though they gain another, ''At the present time the precious metals are employed only as standards of payment, or legal-tender; as the medium of the merest retail trade; as a reserve or se- curity for their issue by banks of circulation ; and as the medium of paying balances of trade both foreign and domestic — all these together do not make 5 per cent of the operations of industry and trade in Great Britain. All the rest is accomplished by means of credit, and the many processes of the 'credit system.' ''It must be a great and mischievous fallacy, then, to regard gold and silver coins as a sort of model medium of exchange, to the characteristics and incidents of which all other modes of interchange must be made to corre- spond. This is nothing less than an attempt to fasten upon industry and commerce the very shackles and in- com-eniences which they have long been struggling to cast away. "There are many ways of making payments without using coins, each of which may stand for what it is worth, and be employed according as it may be available, with- THE EVOLT'TIOy OF MO'SEY. 47 out beiug tortured to work as coins would have been worked if they had been employed. "Where two nieu of business deal largely together, keep- ing the record in their books of account, which once in three months are balanced, and the mutual debts thus paid without the use of coins, there is no possible sense in which the mutual payments thus etfected could be made more eflectual by any reference to coins than by this simple and economical method of balancing the sums of the various entries, debts and credits, expressed in 'Monej^ of Account,' the one against the other. "This mode of payment needs no aid in theory, in prac- tice, or by analogy, from any em])loyment of coins; but this mode of payment is one of the main devices of the 'credit system.' As the debts of men of business find their way into the banks, so do their credits; and the function of the banks, stripped of their many complica- tions, consist chiefly in balancing and thus extinguishing the debts and credits of their customers. There is no ground, we think, for the doctrine that the incidents and characteristics which attend a currency of gold and silver should be imitated, or even referred to, in the process of the 'credit system,' much less regarded as law." From the above, it is evident that Sir James regarded the "words" that constituted what lie called "Money of Account," as a sjtecies of scales for the measurement of things vendible, entirely separate and distinct from coins of gold and silver, and to be exclusively used in the busi- ness that was conducted by the "credit system." He advanced the idea that the quantity of gold or silver necessary to l)e ])ut into the coins, to make them the value of the "words" that named the coins, had to be measured and determined by the idea of value those "words" con- veyed. Therefore, if the "words" of the "Money of Account" were originated, or were used, to convey ideas of labor units, then those ideas determined how much gold and 48 THE EVOLVTIOy OF }IONEY. silver should be put into the coins to make them equal to, or the equivalent of, the number of labor units implied by the words that named the coins. If this be true, is not the use of those things, which serve as representatives of the ''words" of value, in the last analysis, value, whether they are coin, or paper rep- resentatives of the "words of the Money of Account?" Since neither the coins, nor paper representatives, will be accepted in full satisfaction of debt until they are given the power of tender, is not the power of government, that compels their acceptance and ensures their service, value ? "]\Ioney of Account" may therefore be stated to be that growth in the practical intelligence of a people which finally characterizes their ideas of the relation of products to each other — considering onl}- the labor units expended — by "v/ords" used to express the number of labor-units involved, and which are known as the wordtS of value or the language of finance. These observations, setting forth in theory the evolu- tion of value from gold and silver coins to the serviceable use of things which rei)reseut "Avords" that accurately and unchangeably express ideas of labor-units, have not been taken advantage of by governments in providing money for the use of the people. This may have been due to the fact that Sir James con- sidered only that portion of the volume of business which is conducted by the "credit-system," wherein the obliga- tions of the people are so used that they operate to liqui- date each other, unless a balance is left. The settlement of these balances, and the trades of the cash system may not be made by the labor obli- gations; and for obvious reasons the government is re- quired to issue official equivalents to serve the needs of the people in their trading relations. In the consideration of how, and out of what, the offi- cial substitutes should be made, gold and silver were THE EVOLrTION OF MOXEY. 49 assumed to be the substances best fitted for the purpose; and Sir James endeavored to devise a practical working plan for ''use-value" money to conduct the "credit sys- tem/' and intrinsic-value coins to conduct the cash sys- tem, and settle balances in the credit system, without realizing the absurdity of the attempt. The error of making the many obligations which, at that time, conducted 05 per cent of the volume of busi- ness, depend, for their *'use-value,"' upon the gold and silver coins Avhich only conducted 5 per cent of the volume, and which depended upon the power of legal-tender for the value of their use, or their service-value, would have been corrected long since, but for the teachings of Adam Smith, who wrote shortly thereafter. In his work, entitled an ''Inquiry Into the Nature and Cause of the Wealth of Nations," he attracted the atten- tion of the world by his demonstration that the source of value was labor. Though he came to the conclusion, and his reasoning forces all intelligence to the conclusion, that labor is the source of value, he did not have the dimmest comprehen- sion that the language of values, /. c, the "words" of the Money of Account, conveyed only ideas of labor-units — nor that the "word," known as the Unit of the Money of Account, is the Unit of Labor. He did not realize that the obligations of the ])eople were mere individual representa- tives of "words" that expressed lal)or units, and that the legal-tenders — whether metal or paper — were only issued to 1k' used as sul)sti lutes of the obligations of the people when they had lost the value of their use, /. e.. their service, or labor value. He assumed that the "word," known as the T'nit, was the T'nit of Value, and since he was not able to disasso- ciate the idea of value from gold and silver, he decided that they were value, notwithstanding his demonstration that labor was the source of value. The pureness of his faculties appreciated the error, and 4 50 THE EVOLUTION' OF 2I0NEY. he endeavoied to foimulate, or oi-igiuate, a Unit of Labor in his desire to remove the logical discrepancy. When his ingenuity conld not devise a practical work- ing substitute for the Unit of Labor originated by the people, but which his commercial materialism would not permit him to see, though he held it in the focus of his intellectual eye, he abandoned the effort. His intelligence having been compelled to accept a cer- tain quantit}' of gold or silver as the measure of the value of the Unit, it was further compelled to adjust its reasoning to the acceptance of that I'nit, and in his desire to preserve the truth of his deduction, that labor is the source of value, he drew a distinction between the value of the product — which he contended was determined by the labor expended on it — and the price, or legal tender gold and silver, that the product would command. He drops into a footnote in explanation of the error, and wrote that when he or any one writes or thinks about money, it is easier and better to think of it as having no intrinsic value. Still contending that the value of products was deter- mined by labor, but their price was the quantity of gold or silver they would exchange for, he continued his pro- found inquiries into the Nature and Causes of the Wealth of Nations in a work which has been an authority for the right of the few to apply intrinsic-value law to the "use- value" practices of the many, notwithstanding it produces panics until it causes revolutions. The intellectual, moral, religious, and physical bondage of the many to the few — brought about by the recurrence of the application from the second to the fifteenth cen- tury — became more servile and inhuman as the amount of gold and silver decreased from $1,800,000,000 in the time of Caesar, to $200,000,000 at the discovery of America. With the exception of the Eepublic of Venice, and its bank, the civilization of the world found only such relief as was secured from the mediaeval bank-credits, until the THE EVOLLTIOy OF 2I0JS'ET. 51 iucreased supply of gold aud silver from America grad- ualh' produced an intellectual, moral, religious, aud phys- ical freedom that cast off the serfdom of the Dark Ages. The abundance of gold and silver — the more facile use of the bank-credits; and then the enlarged use of bank- notes, and of the many devices of the people that custom made legal, produced enlarged prosperity; but the civili- zation of that prosperity is unwholesome, for it is the civ- ilization of intrinsic-value law, and "use-value'' practices. The bestowal upon class of the exclusive right to apply intrinsic-value law to "use-value" practices, has always operated to enlarge the prosperity and power of the few at the expense of the many, until — as a result of the exer- cise of the barbarian right — there is produced an unnat- ural degeneracy in both class and the i^eople. A degeneracy that may be seen in the social immorality, venal intellectuality, financial, commercial, religious, and political degradation of class, its sycophants and tools: and the degradation of the vicious and unnatural immorality that has always characterized mankind, as it is deprived of the right and opportunity to live by the sweat of the face, and pressed backwards to the dead- line of existence. CHAPTER V HE I'uited States was intended to be an asylum from the injustice, inequities, and iniquities of governments that gave chiss the right to exploit the people, and enforced the right whenever and as often as it was asked or demanded. A close reading of the history of the Colonies will show that the prosperity of the i>eople was due to their enjoy- ment of "use-value," and when the Mother Country, in the interest of class, not only applied intrinsic-value law to their ''use-value'' practices, but denied them the longer enjoyment of ''use-value,'' their prosperity was crushed, and from a ha])py they suddenly became a distressed and suffering people. It was realized that the operation of laws — in the making of which they had no part — was gradually, but surely, transferring their values to the Mother Country. They felt in their hopes and in their ambitions that the future held nothing for them but travail of spirit, an- guish of mind, and suffering of body; but they had no intelligent conception of the cause of the change, as is indicated by the war cry of the Eevolution : '"Taxation without representation is tyranny." The Ignited States was the result of the revolt against the application of intrinsic-value law to use, or labor- value practices. An inferior number of collective people — acting as a unit — had exercised their power in such a sacrificial, loyal, and determined spirit that they had defeated the most powerful government in Europe, and wrested from her insatiate demands their right to separate autonomy and '"use-value" practices. THE EYOLUTIOy OF ilOXEY. 53 Could they, as a collective people, continue the benign and equitable exercise of that power towards each other, after the necessity for the sacrificial and cohesive exercise of power against a common enemy had been removed? That desideratum is the test of government. The formation of government by such a people was watched with intense interest to see if the good results of the Kevolution could be permanently secured. Govern- ment is a necessity for all collective people. The avarice, lust, and ambition of a people has no sense or appreciation of equity; and might cause injustice to rule until it is curbed, and made to respect right. fjquity is, therefore, artificial in its efll'ect, but its spirit is the cause of liberty in government; for government is only the manifestation of the intelligence exhibited in the equity and legality of the practices which secure the en- joyment of the fruits of labor. All collective people must also act as a unit, in order that they may protect themselves from the aggressions of each other, and from the aggressions of other collective people, acting as a goA'ernment. The people of one nation have no more right to live off the labor of other people, than one man has the right to live off the labor of another ; and Avhenever attempted it should be cause of war between nations, and cause of revolution, if allowed by a govern- ment among its people. After the Revolution, the colonies, as i^tates, were a collection of separate and independent units that had no inducement to act as a general unit, except for better and safer protection against the aggressions of foreign gov- ernments. As seiiarate and indei)endent States they could not hope for, nor did they desire, any greater ]tros]writy than they had enjoyed from their equitable conduct towards each other, under their "use-value" ]traower was felt in the more serviceable use of the legal-tender money, but not intelligently appreciated, for the value of the use was regarded as intrinsic-value; and, therefore, the exercise of the power was considered — not a function of govern- ment — but a private right that must, in consideration THE EVOLLTIOX OF MONEY. 57 of its importance to the people, be supervised aud regu- lated by Congress — not bj the States. There was a subconscious fear on the part of some mem- bers of the Convention that the regulated exercise of the power might violate the sacred principle of ''equal rights and opportunities for all, aud special privileges to uone/' when it was proposed to limit the use of money to gold aud silver; but the fetish worship of the precious metals, and ignorance of the fact that the issue of money Avas the exercise of a sovereign power caused the Constitution to be written as it was. It was contented that the sacred principle had been preserved in the claim that every one had the equal right to carry his gold and silver to the mints to be coined into money. This contention is considered sound by many today, though it has been demonstrated that it has always been ji monopoly for the few — who have had the exclusive en- joyment of the benefits that naturally and unavoidably accrue from the exercise of said i)0wer — until individual wealth, greater than the aggregate wealth of some na- tions, has been developed. The intrinsic-value system was strengthened by with- holding from Congress, and denying to the States, the exercise of the sovereign power "to emit bills of credit;" Avhich, proi>erly construed, means that both Congress and the States were — in the interest of class — deprived of the right and power to assist the people in the con- duct of their business by the issue of ''use-value" repre- sentatives of the "words" of tlie Money of Account, made efficient, as solvents of debt, by the legal-tender power. For centuries the exclusive use of gold and silver had not, by reason of the scarcity of the metals, been ,suilicient to conduct the business of tlie peoi)le. The people owed their advance from barbarism to civili- zation to the use-value, /. c. service, of bank-credits at first, and then to the use-value, /. c, service, of bank- notes ; and they, of this country, owed their Indei)endence 58 THE EVOLVTIOlSi OF MOXEY. to the use-value, /. e.^ service, of the Continental currency, though it was ruthlessly destroyed in favor of gold and silver, or intrinsic-value; and yet under the new govern- ment they were to be deprived of the right to ''use-value," and, in the conduct of their business, compelled to rely on a system that had not been efficient for centuries. This denial to the people of the right to "•use-value" was buttressed by withholding from Congress the power to grant charters of incorporation, because of the fear the power would be abused by the grant of a charter to a bank with authority to issue notes — it being understood that the denial to the States of the power ''to emit bills of credit" prevented them from chartering Banks of Issue. The Constitution, therefore, gave the favored few gold and silver owners the right to the exclusive use of the barbaric intrinsic-value system, enforced by the legal- tender power of the government; and it withheld from Congress, and denied to the States, all power to give the people the right to use paper representatives of the "words" of value, impressed with the legal-tender power, or what may be called "use-value." The Constitution was, in its provisions for, and restric- tions on, the issue of money, a retrogression to the methods of advanced barbarians, however admirable it may have been in other respects ; and if its provisions had been strictly enforced, the government would have died by the hands of its accouchers. "Use-value" is as essential to the existence of a govern- ment and its people as is air. The "words" that convey to intelligence ideas of value are, in the service rendered by their representatives, use- value, and they are equally essential. Therefore, Hamilton and Jefferson changed the "words" of the Money of Account from the pounds, shillings, and pence of the English language, to the easier-computed decimal words, dollars, dimes, cents, and mills. Representatives of these "words" are being continually, THE EVOLUTIOy OF MONEY. 59 numei'oii.sly, aud variously issued by the people in the couduet of business, aud are known as bills, accounts, notes, acceptances, drafts, orders, checks, deeds, mort- gages, trusts, bills of lading, warehouse receipts, bonds, stocks, and other devices employed. They are chiefly used in the "credit, or bookkeeping system"' of conducting busi- ness, and liquidate each other at their labor values, so long as they are entitled to aud have ••use-value." It is not possible, in the "credit-system,"' for the obliga- tions of the people to exactly liquidate each other, aud after they have efficiently served their full use, as liquida- tors, and been cancelled, there are balances on many, if not all, of the books that remain unsettled. These unsettled balances, the obligations of the people which have lost their ''use-value," and that portion of the volume of business which is known as retail, and con- ducted by the cash system, has to have a medium of ex- change. It is just here the government must intervene and fur- nish the people with money, or official substitutes, that should be true substitutes of the labor value obligations of the people, so that the equities might be preserved when they are used to settle balances, to pay those obligations which have lost their "use-value," and to conduct the retail trade, or that business carried on by the cash system. When money was issued as a private right, and before the legal-tender power of the government was necessary to compel its acceptance as solvents of debt, gold and sil- ver were regarded as best fitted to perform the service, be- cause of their inherent worth, or intrinsic-value, as has heretofore been explained. But after gold and silver had, by reason of their cumbrousness, inefficiency, and proven unfitness to serve the needs of a higher civiliza- tion, been forced to surrender that use /. c, service, to bank-credits and bank-notes, and, to the extent that they had surrendered the iierfonnanco of the 60 THE EVOLUTION OF ilOXEY. service, had lost their so-called iutrinsic-value, and had to be given the power of tender, the issue of mone\' became a function of government, and the exercise of one of its sovereign powers. This had been clearly shown by Sir James Stewart when he demonstrated that the ''words" of finance were the "words" of the Money of Account — that "Money, by which we intend coins of gold or silver, is neither a standard of value, a measure of value, nor a representa- tive of value ;" and it is not understood why he was not appreciated when he wrote : '"Money which I call 'Money of Account' is no more than a scale of equal parts, in- vented for measuring the respective value of things vendi- ble." If the "words of value" are used to express the mean- ing of the many and varied obligations issued by the peo])le; if these obligations need official substitutes, /. c. legal-tenders, to take their place when they lose their right to serve as liquidators of debt, it is not understood why gold and silver were selected and given the Tender quality to enable them to serve the necessary use, solely on account of their claimed intrinsic-value, if intel- ligence, and not avarice, was engaged in the solution of the problem. Though Adam Smith failed to assert that labor was value; though he failed to assert that the "words" of value were expressions of labor, or that the unit of value was necessarily and logically the unit of labor, /, c. Sir James Stewart's ''T'nit of the ]\[oney of Account," he had demonstrated that labor was the source and origin of the idea of value — and as a necessary consequence, that labor was value. The teachings of these two men, and the experience of the colonists, before and during the Revolu- tion, had not given the intelligence of the country any knowledge of "use-value;" but, to the contrary. Con- tinental, or "use-value" money, unsupported hi/ the power of tender, had been left to the mercy of intrinsic-value THE EVOLUTIOX OF MOXEY. 61 law until it had caused such loss, that the framers of the Constitution endeavored to eliminate the possibility of *'use-value" j)i'actices. The government, however, was not able to exist from April 30, 1789, when Washington was inaugurated, until December, when Congress convened, without the assist- ance of "use-value;'' and Hamilton — who had been ap- pointed ^^ecretary of the Treasury — informed that body that there was not enough gold and silver in the country to serve the use required, and that he had been compelled to support the government by resorting to ''use-value," when he informed Congress that he had been compelled to issue his individual notes to support the government, inasmuch as he had no authority to issue them, as Secre- tary of the Treasury. Hamilton, as Secretary of the Treasury, felt, if he did not intelligently appreciate, the necessity for "use-value," and he asked Congress for authority to adopt the "use- value" system, when he asked it to authorize him to issue the necessary number of notes to support the government. The members of the Constitutional convention had shown their ignorance of the issue of money — if it is con- sidered a science — when they failed to realize that it was the exercise of a sovereign power; when they failed to realize that it was the use, and not the in- herent worth, of the representatives of the ''words" of the Money of Account that is value; when they failed to realize that the "words," which convey ideas of value, are labor expressions ; when they failed to real- ize that the representatives of the "words" need have no intrinsic-value, since they have to have the power of Tender to compel their use, /. c. service, as sol- vents of debt, whether they are gold, silver, or i)a])er; and when they failed to realize that they had dejirived the government, and the i>eople, of all "use-value," when they withheld from Congress and denied to the States the right "to emit bills of credit." 62 THE EVOLUTION OF MONEY. The matter uoav comes before Congress upon the state- ment — admitted — that the intrinsic-value gold and silver system has proven a failure, and something will have to be done. Hamilton, as Secretary of the Treasury, had the matter in hand, and it is proper to ascertain the extent of his information on the subject. In his sixth Continental letter he had contended that the government ought to own all the mines of the precious metals. This indicates — though he did not understand it is power of tender which makes the use of gold and silver certain and stable, and though he did not under- stand its exercise is one of the sovereign powers— that lie nevertheless felt the exercise of the power was the cause of the certainty and stability in the use of gold and silver coin which determined their value; and, there- fore, should be made an asset of the government that would enure to the equal benefit of all the people, and not the exclusive benefit of a few. If he had been able to throw off his fetish worship for the metals; realize that the issue of money was a func- tion of government; and that the power of tender was the cause of the value of the use of gold and silver coin, he could have improved on his idea that the government should own the mines of precious metals, by giving gold and silver the exclusive right to be exchanged for governmental legal tender notes, at some assigned labor value given the unit of the Money of Account, /. e., the word, "dollar." But instead of having a com- prehensive understanding of the science of the subject-matter, Hamilton accepted the prevalent error that gold and silver were value; that the istsue of money was a private right; and endeavored to graft on the intrinsic-value system of the Constitution "use-value"' practices to aid in the support of the government. Jefferson came to his assistance, but the extent of the information of the two is shown in the selection of the THE EVOLVTIOy OF MONEY. 63 words dollai-s, dimes, cents, and mills, as the "word^ of value," or, following Sir James Stewart, as the "'words of onr Money of Acconnt," naming the ''word," dollar, as the Unit. If they had comprehended, when they decided on the ^'words,'' dollars, dimes, cents, and mills as the ''Money of Account,-' that those words were to be used as expres- sions of labor; and when they designated the word, "dol- lar," as the ''Unit of the Money of Account," that they meant the "unit of labor;" and that representatives of those "words" were only needed to settle balances, serve as substitutes for the labor obligations of the people, and to conduct the cash system, they would have seen the in- congruity and inconsistency of selecting gold and silver, and giving them the legal-tender power, Avhen all that was necessary to make the things selected serve the use, was the power of tender — not inherent worth. Having no appreciation of these things, but accepting gold and silver as value, they perfected the intrinsic-value system by deciding that the value of the Unit of the Money of Account, viz : the "word," dollar, should be 3711/4 grains of silver, and that its full equivalent should be l-lo part in weight of gold. Gold and silver — at this valuation — were given the legal-tender power; and the value of their enforced use and inherent worth has been regarded as the intrinsic-value Avhich made them the standard, and measure, of the lahnr that inai/ he in produets. This was the constitutional intrinsic-value system ujton which Hamilton endeavoi-ed — doubtless assisted by Jef- ferson — to engraft his "use-value" pi-actices, when he asked for authority, as Secretary of the Treasury, to issue notes that they might enable taxation to support the gov- ernment. ^Vhen lie realized that the intrinsic-value bene- ficiaries had more inllnciice with Uongiess than tin; Ad- ministration, he saw the danger of their avarice, and cast 64 THE EVOLUTION OF MONEY. about for some protective measure that would guard the people I'rom their aggressions. The theory of the banking system of England was well known to him, and while it may not have met the idea of safety conveyed in his sixth Continental letter, it was the best that could be done in the knowledge of the science of finance at that time; and he hastily prepared a bill along the lines of the theory and practices of the Bank of England, as the best safeguard that could then be devised. Congress passed his bank act, notwithstanding the power to grant a charter had been withheld from it, and gave the bank authority to issue notes, notwithstanding the power "to emit bills of credit"' had been withheld. The result of this legislation was to give certain gold and silver owners the right to the value of the use of the notes of a bank, or ''use-value,'' for twenty years in order that they might provide money for the government and the people, until enough gold and silver could be found. Under the provisions of the act — granting a charter to the First Bank of the United States — the entire issue of use-value money was turned over to that institution for twenty years, for Congress obligated itself not to grant another charter for that period. The Bank was capitalized with all the gold and silver its owners and the government could command, with the right to issue four dollars of bank-notes on each and every dollar of gold and silver in its vaults, which, it was thought, would enlarge the official representatives of the "words" of the Money of Account, until they would be sufficient to settle the balances in the ''credit-system," act as substitutes for the obligations of the i)eople, and conduct the cash system. This gave the coin owners the value of the use of the notes, or "use-value," in addition to intrinsic value, during the next twenty years, for the bank with the right to the use of the notes was conferred upon them — ^as an excluisive privilege — for that period. THE EVOLUTION OF MOXEY. g5 If the provisions of this bauk-act had been strictly enforced, it would have caused the destruction of the gov- ernment before the expiration of the twenty yeai's, for though the Bank violated its charter and iissued seven, and probably more, dollars of bank-notes on each gold and silver dollar in its vaults, the scarcity of money caused such distress — even with the use of all these bank- notes — the people would have revolted. No one who had gold and silver would carry it to the mint to be coined into dollars to be placed in competition with bank-notes, each of which had as much value in its use, or "■use-value," as the coin dollar, though four notes had been issued on each coin dollar in the bank; and when Congress showed such respect for the legalized graft of the First Bank, that it would not grant another char- ter, it was realized the people must "stand and deliver" to that bank, or find relief. Under this monopoly of intrinsic value and "use-value" iu one bank, the people Avere deprived of the use of any additional gold and silver that came into the country, unless the owners were willing to put it into active service at from one-fourth to one-seventh the value that the Bank was using gold and silver; for it was issuing from four to seven of its notes on every coin dollar in its vaults. This monopoly of coins and "use-value" notes was the cause of the distress of the people; and when the First Bank failed to issue more notes; when Congress would not grant another charter; and the owners of additional gold and silver would not put their coin dollars into circulation to com])ete with the bank-notes, the ])e<)ple of the states induced the Legislatures to do for the addi- tional gold and silver, what Congress would not do — put it on equal terms with the gold and silver of the First Bank. Therefore the State legislatures paid no attention to the constitutional inhibition that a State shall not 66 THE EVOLVTIOy OF MOyEY. ''emit bills of credits," and all of them chartered banks with authority to issue three times as much ''use-value" notes as there Avas gold and sih-er held in the vaults of the banks. The States not only chartered one bank each, but they chartered as many as was applied for, and the incorpora- tors virtually wrote the laws. The State Banks, like the First Bank of the United States, were given the right to both the intrinsic and '"use-value" sys- tems; and the monopoly of the First Bank was destroyed by the competition. While the State Banks were not as large, in their cap- italization and as immense in their volume of business, as the First Bank, the legalized graft was proportion- ately much greater, for there was such careless super- viision over them that the same gold and silver was used to organize different banks; and so many notes were is- sued that the value of their use, or their "use-value," became so cheapened it was an advantage to the people that more than compensated the loss of the panic that was precipitated when demand was made that they be paid in coins. The State Banks necessarily destroyed, in great part, the graft of the First Bank; and the cheapened use, or service, of the bank-notes saved the existence of the gov- ernment. No people in the history of the world ever had such an abundance of "use-value" money, and no people ever prospered as did the people of this country with the assistance of the cheap bank-notes, notwithstanding the periodic and heavy losses incurred by the criminal appli- cation of intrinsic-value law to their "use-value" practices, which created the panics. CHAPTER VI. HE graft embodied in the two systems of bank- ing created factions — known as parties — that have struggled for the control of the United States. The history of this country is the history of the yary- ing fortunes of the two factions, as they have contended under varying and changing alignments. The change in the goyernment from an intended lie- public to a plutocracy, has been caused by the legal abuses necessary to sustain the right of the gold and silver owners to the exclusive enjoyment of ''use-value," intrinsic-value, and the Legal-Tender power of the gov- ernment. In other words, the change has been necessary to secure to the gold and silver owners — and now the gold owners alone — the exclusive enjoyment of all the benefits that necessarily accrue from the exercise of the sovereign power to issue money — the most dominant of all the sov- ereign powers of a people. The first abuse was in su])port of the First Bank of the United States, and was judicial. The State of Georgia assessed a branch of the First Bank. The bank refused to j»ay the tax. The sheriff collected it by force. The bank sued the sheriff' for the return of the money. The State Courts gave judgment in favor of the sheriff. The bank then sued the sheriff' in one of the inferior United States Courts. It dismissed the case on the ground tliat it had no jurisdiction. The bank appealed to the Sui)reme Court of the United States. The issue in the case was, whether a corporation — such as the bank — was a citizen. 68 THE EYOLUTIoy OF MOXEY. If not, the Fnited States Courts had no jurisdiction, for their jurisdiction was limited, in controversies aris- ing between the people, to the citizcjis of different States. The word citizen was also selected to exclude the cor- porations of one State from being entitled to the rights, privileges, and immunities that had been secured to the people of each State, in all the States. The purpose in selecting the word citizen was to con- tine the exercise of the rights of corporations to the limits, and the jurisdiction, of the State granting the charter; for, if corporations — in the exercise of their charter rights — were to be confined to the State granting the charter, then the State Courts should have exclusive jurisdiction over them. The power to grant charters, as well as the power "to emit bills of credit,'' had been withheld from Congress. It was not supposed that Congress wooild ignore this action of the framers of the Constitution, and attempt to confer the detested "use-value," /. e., the use of bank- notes, on gold and silver by the grant of a charter for a bank, and, therefore, there was nothing in the Constitu- tion that was intended, or should have been construed, to refer to a corporation chartered by Congress. But after Congress had seen proper to grant a charter to a bank for twenty years, with the right to issue notes, and that bank, in a controversy with a citizen of a State, had appealed to the United States Supreme Court, the chief thing to be considered was the effect the decision might have upon the right of the States to exclusive jurisdiction over their corporations. This seems to have been the view at first taken by the Supreme Court, for it decided, in the First Bank vs. Deveau.i-. 5 Cranch Eepts., Gl, that a corporation was not a citizen; but in its desire to protect the bank from the hostility of the State governments, it ignored the rights of the States and decided further that it could look THE EVOLlTIoy OF MOyEY. 69 through the corporation as a faculty, aud see who coui- l>osed the stockholders. When it appeared — as" the de- cision states — that the stockholders were citizens of Pennsylvania, and, as such, had the right to the jurisdic- tion of the Federal courts, jurisdiction was taken, and the iSupreme Court gave the bank relief, regardless of the eflect the decision would have upon the rights of the ^^tate courts to exclusive jurisdiction over their corpora- tions. This determination — manifested by a partisan judi- ciary — to secure for the gold and silver owners both intrinsic value and ''use-value" has never abated, and, as a result, corporations of all kinds are citizens, not only enjoying the rights, privileges, and immunities of all the States, but the protection of the courts of the United States. Jefferson's feelings, if not his intelligence — as to the issue of money — were more democratic than Hamilton's, and he realized — while both the Congressional bank and the State bank systems were, in their right to apply intrinsic-value law to ••use-value" practices, erroneous — that the people Avere more benefited by the increasing use of State bank-notes than by the restricted use of the Congressional bank-notes. He therefore organized the faction known in that day as the Eepublicaii Party, to get rid of the First Bank of the United States, and leave the issue of money to gold, silver, and the State Banks until something better could be devised. He aligned him- self with the State Bank faction, and they took charge of the government. His faction was in control when the charter of the First Bank of the T'nited States expired, in 1801); and after it was refused a renewal, it declaied war against Jefterson, the State P)anks, and the Bepub- lican Party. Shortly after the refusal to renew the charter of the First Bank, the government became involved in the War 70 THE EVOLUTION OF MONEY. of 1812. The war had to be financed by the Treasury and the State banks. The State banks, confident — after they had caused Congress to refuse a renewal of the charter to the First Bank — that they now had the exclusive right to the issue of money — both by the use and intrinsic-value systems — showed their patriotism in the following liberal terms on which they would finance the war: They would only agree to exchange their notes for the interest-bearing bonds of the government at 80 cents on the dollar, though they were payable in coin, and though the States allowed them to issue four notes on every dollar of coin. The interest on their coin was five-fold until the bonds were paid, when their principal was enlarged fivefold. This unpatriotic legalized graft of the State banks was wormwood and gall to those who — as owners of the First Bank — once had the exclusive right to the graft; and as they held Jeft'erson responsible for their loss, they cursed and abused him, and have reviled his teachings to this day. They so bitterly resented the State banks" enjoy- ment of the graft, that they refused to join in it, and invested their gold and silver in English bills of exchange at Quebec. The effect of drawing this gold and silver from circulation, and loaning it to England, drew so much out of the State banks that it was easy to break all of them by the application of intrinsic-value law to their "use-value'' practices. The State banks were forced to suspend, and in this contingency the government made such use of the notes of the suspended banks as it could, but was com- pelled to issue its own notes to sustain the war. The use of its owm notes was so efficient that the war was waged to a successful termination. The warfare against the notes of the suspended State banks was continued until they became so inefiicient that Congress was induced, in 1816, to sell to the traitors in the war of 1812 a charter for the Second Bank of the United States. THE EVOLVTIOy OF MONEY. 71 According to the terms of the sale Congress was to retire its legal-tender or "nse-vahie"' notes, take part of the stock, and place all the money of the government in this bank. Congress — in its effort to carry out its contract with the Second Bank — authorized the issue of interestrbearing coin bonds to take np its legal-tender, or "use-value notes; but the service or use of the notes was so much more valuable to the people than any service or use they could make of the bonds, they would not make the ex- change. The Bank complained of this violation of the agreement, for to the extent the notes remained in circula- tion and served the needs of the people, to that extent their ''use-value" deprived the Bank of the value of the use of its notes. Therefore, the Secretary of the Treasury issued an order that the notes of the government would only be received in payment of government dues at a designated place — though they Avere issued as legal- tenders in the payment of all debts due the government. Here was a conflict of contracts. When the government issued the notes, it was with the express agreement that the people should have the right to use them in all pay- ments to the government. This gave them full legal- tender, or "■use-value,-' for that purpose, and the jDeople were availing themselves of the value of that service, until the gold and sih'er owners influenced Congress, for a consideration, to take the value of that service aAvay from the people, and confer it on them. T'nder its contract with the Bank the government should have invited the people to exchange the legal- tender, or ''use-value," notes of the government for bonds, and if they did so the contract with the bank could have been carried out. The officials then were like officials now — all contracts with the Money Power must be resijected, notwithstand- ing any contract with the people — and the order was 72 TEE EVOLUTION OF MONEY. issued tliat the government notes would not be received except at the designated place. This order was resisted; a case made for the courts, and the officials of the government were made to respect its contract with the people. (23 Federal Cases, p. 1124.) There seems to have been some virtue in the judiciary, in matters of money at that time, but little in Congress, for it deprived the notes of their legal-tender quality, thereby enabling the Bank to destroy the value of the service thej were rendering to the people, which enabled the Bank to get hold of and exchange them for the bonds. The warfare between the State banks and the Second Bank continued, and a fatal move was made b^' the State bank faction when the State of Maryland assessed a prohibitive tax upon the operations of the branch of the Second Bank located at Baltimore. The bank refused to pay the tax. The State Courts gave judgment for its collection. The bank appealed to the Supreme Court of the United States. [4 Wheaton (S. C. Rep.), 518.] The issues in the case were: 1. Congress had no power to grant the charter to the Bank. 2. Congress had no power to authorize the Bank to issue notes. 3. The State of Maryland had no right to tax the Bank out of the State. The third issue was made by the Second Bank, not- withstanding the Supreme Court had decided in the case of the First Bank vs. Deveaiix (5 Cranch's Reports, 61), that a State had the absolute right to tax anything that was in, came within, or wa*s brought into the State, and that there was no escape from unequal or unjust taxation except in the equitable conduct of subsequent State legis- latures. Therefore there Avas danger to the Second Bank from the prohibitive tax of the State of ^laryland, even if the Supreme Court should decide that Congress had both TEE EVOLUTION OF MONEY. 73 the power to graut the cluirter to the Second Bank, and the right to authorize the bank to issue notes; for if the Supreme Court respected its former decision, the Second Bank could not operate in the State of Maryland unless it paid the tax, nor in any of the other States that might see proper to impose a prohibitive tax. In the fear of such a decision, and to secure the assistance of corporate activity free from hostile interference of the States, the Second Bank sought to utilize a case in New Hampshire, where the Legislature had passed laws changing the terms of a charter granted by the King of England before the Kevolution. It was hoped to utilize this case by having the Supreme Court decide that the grant of a charter was a contract, and, as such, protected by the clause of the Federal Constitution that no State should impair the obligation of a contract. All the interest in the Maryland case was at once transferred to the New Ham]jshire case, and it was hur- ried to the Supreme Court and tried one month before the Maryland case. TJie issue, whether the grant of a charter was a contract, could have been made in the Mary- land case, and the decision confined to grants made by Congress. This would have preserved the rights of the States to exclusive jurisdiction over their own corporations, and saved the right of the Second Bank to oi)erate in the State of Maryland, if the exercise of tlie power should liave been held to be constitutional, but it would not have given the right to make that use of the State corporations which is now causing such civic unrest. When it was decided that the grant of a cliarter by the King of England was a contract which the sover- eignty of New Hampshire must respect, reason stood appalled, for it was a principle unknown to human intel- ligence and has never l>een accejjicd. The intention to secure a decision in tlu> New Hamp- shire, or ''Dartmouth College," case which could l)e util- 74 THE EVOLUTION OF MONET. ized to aid the Second Bank in the decision of the Mary- land case, became so shameless in the hatred engendered by the factional fight that the majority members of the Court seem to have lost sight of the dignity of their high offices, in the malignancy with which they decided this case. They not only held that Congress had the power to grant the charter to the bank with authority to issue notes, when they knew both powers had been withheld from Congress, but they modified their previous decision, that a State had the absolute and uncontrollable sovereign power to tax when they decided that the State of Mary- land could not exercise that power to destroy the opera- tions of the bank chartered by Congress. The decision in the Maryland case was an infringement upon the absolute right of the States to exercise their reserved sovereign power to tax; and the decision in the ^'Dartmouth College" case was an infringement upon the exclusive right of the States to exercise their reserved sovereign power to regulate and control their corpora- tions. For if the grant of a charter by a State is a con- tract, then any action of a State, in reference to the exer- cise of rights under the charter, becomes subject to review by the Courts of the United States, though a corporation be not a citizen. These decisions changed the provisions that the wisdom of the framers of the Constitution intended should secure to the States exclusive and absolute control over their corporations, to provisions which gave to the Courts of the United States supervisory regulation over the exer- cise of State sovereign powers in the regulation and con- trol of their corporations. A superior wisdom on the part of the Federal Supreme Court that is manifest in present conditions, and more clearly shown in the fact that, in practical effect, corpora- tions — not the sovereign States — now have their repre- sentatives in the Ignited States Senate, though in theory, and osteuisibly, they are representatives of the States. THE EVOLUTION OF MONEY. 75 Whoever exercises the sovereigii powers of the States should have representatives in the Senate; whoever exer- cises the dominant sovereign power to issue money will have representatives in the Senate; and it should not be cause of surprise that corijoratious have their representa- tives in the Senate, since their owners exercise both the sovereign power of Congress to issue money and to lay import taxes, and also exercise most of the sovereign poAvers of the States. The profits of ''use-value'' were being enjoyed by those who owned and manipulated the banks — State and Na- tional — and there must have been a demand for the use of all the notes they had the courage to issue, consider- ing the fear of the api^lication of intrinsic-value law to "use-value" practices. The hesitation to issue notes, except upon the basis of the proper amount of gold and silver, was increased by the watchful jealousy of the banks, and a fear that a loss might be sustained if any of the banks should fail. Either on this account or from some other cause, there was such a scarcity of both intrinsic-value and ''use-value" money in the State of Missouri that this State was moved, in tender considera- tion of the distress of its people, to render them necessary assistance. Missouri, therefore, without the intervention of a bank, devised a safe scheme by which — until gold, silver, and bank-notes could be secured — it could furnish its people the "use-value" money so necessary to the advance- ment of their prosperity. A case was soon made denying the right of Missouri to furnish "use-value'' notes to its people. The case reached the Supreme Court of the United States [Craig vs. The State of Missouri (4 Peters, 10)], and the same members who had decided that Congress had the power to grant to a few gold and silver owners a charter for a bank, with authority to issue notes, decided that Missouri could not render assistance to its people 76 THE EVOLVTIOy OF MONEY. by the issue of notes, however severe their distress from the scarcity of money, because it, in effect, supplied them with the "use-value" which belonged to the owners of gold and silver, and their banks. The people of Missouri were compelled to wait for their prosperity until the gold and silver owners would find it profitable to come with their banks and share it with them on such terms as they might see proper to impose. This decision of the Federal Supreme Court emboldened the Second Bank to make an effort to get rid of the State banks, and secure for itself a monopoly of the benefits of "use-value." A case was made in Kentucky, because that State was operating a bank as a State institution, and it was more like the Missouri case than those instances where the States granted charters to individuals to operate banks, and issue notes. This case reached the Supreme Court of the United States (Briscoe vs. The Bank of Kentucky, 11 Peters, 252), and the same members of the Court, who had taken care of the Second Bank of the United States, decided that the State of Kentucky violated the constitutional inhibi- tion against any State emitting bills of credit when it authorized the bank to issue notes ; but before the decision became binding the leading member died. The Supreme Court had been composed of four Second Bank judges, and three State Bank judges. The death of the leading Second Bank judge, and the appointment of another State Bank Judge, reversed the majority in favor of the State banks, and the case was reheard. The decision upon the reargument was a.s shamelessly in favor of State banks as the former had been in favor of the Second Bank of the United States. The States, the Ignited States, and the People were left without any protection from the impositions of the gold and silver owners. The States had been refused the right to furnish the people with the "use-value" notes THE EVOLVTIOX OF MOyEY. ^^ necessary to sustain the States, and enable the people to support themselves, but they could gives the exercise of the right to the bankers. The power "to emit bills of credit," as well as the power to grant charters of incor- poration, had been withheld from Congress, but the Supreme Court had decided — in the interest of the gold and silver owners — that Congress had the right to exer- cise both powers. The contention that Congress had the power to authorize the issue of notes, and make them tenders in the payment of debts, both public and private, was denominated the heresy of heresies. The x^eople could, therefore, be given no protection from the human harpies that have helloed themselves at every feast that has been spread by nature and the labor of the people; and yet the munificence of the Xew World was such that they prospered in spite of the harpies, and the panics they would periodically create. The charter of the Second Bank expired in 18.30. Pow- erful and influential as it was, the bank suspected that Jackson was hostile to it, and its managers purchased from Congress a renewal of its charter during his first administration. In the consciousness that they had more influence with the political party which elected Jackson than Jackson had, they presented their bill for his approval. Jackson vetoed the bill and the war between him and the Second Bank was on. It was soon evident they had taken the ])arty from Jackson, and had left him stranded. That is generally enough for any aspirant for the Presidency, but was not for Jackson. He was a political party in his own individuality. Jackson was not informed in the matter of finance, but he had sense enough to know that he knew as much as those who were claiming full knowledge of the subject. He sensed far beyond his knowledge; and when the President of the Ignited States, in his person, was defied by the mere managers of a financial institution, he kmnv it ought to be destroyed. In his battle lust, his i)erc(>i»tion 78 THE ETOLVTION OF MONEY. became so acutely sensitive that he intuitively divined the weak spot of his adversary ; and it did not take him long- to come to the conclusion that the weakness of the mana- gers of the bank was their willingness and their efforts to corrupt the electorate. Jackson at once charged them with this crime, convicted them before the people, and. with the assistance of Benton, was re-elected. He had no respect for the decision of the fc^upreme Court, so un- patriotically partial to the Second Bank, and refused to be bound by it, stating, in effect, that he had sworn to uphold the Constitution, as it was intended — not as it was construed by the partisan interpretation of that body. The corruption of the managers was such he was unwilling for the money of the government to remain in their bank until its charter expired by limitation. He, thei'efore, ordered the deposits to be removed to the State banks, though it was claimed that such action would precipitate a crisis which would occasion fearful loss to the people. Jackson did not fear a crisis, and if it could only be prevented by a seeming condonation of the corruption of an unconstitutional institution, he was willing for the crisis to come, and the responsibility to 'rest upon those who had galvanized the l)ank into existence, and foisted it upon the people. Jackson knew nothing of the science of finance, and he knew of no one who did. He felt and saw the injustice and inequity of turning over to banks, chartered by the States and by CongreStS, the unconstitutional right To issue money, when the same right was refused to Missouri, though it would have been more excusable to let Mis- souri unconstitutionally render assistance to her people than to favor the few who owned the banks. Jackson destroyed the Second Bank when he was made to feel its insolence and realized its corruption ; and he struck a blow at the State banks, when he saw that their owners were using their right to issue money to steal the public lands. He, therefore, became a barbarian in THE EVOLUTIoy OF MOSEY. 79 finance when he issued an order to enforvc the terms of the Constitution, and receive no payments for public lands except in gold and silver coins. The discredit of State bank-notes — after destrojang the Second Bank — ^vir- tually forced the countrj- to the hai-harianisni of the intrinsic-value system of the Constitution, and the panic of lSo7 resulted. Jackson, in his enforcement of the Constitution as it was intended, gave the country one experience of a civ- ilization without "use-value,'' and it should have been sufhcient, for the distress of the jjeople was such that his successor had to call a special session of Congress. It was not Jackson's fault that the enforcement of the financial part of the Constitution was so fatal, but the fault of those who withheld from Congress the exercise of the sovereign ]iower to issue money, in order that they might bestow it upon the gold and silver owners; and the fault of those who enlarged the power by giving the gold and silver owners the right to "use-value'' in addition to intrinsic value, when Congress gave them a charter for a bank with authority to issue notes, and the Supreme Court held it was constitutional. With such dearly-]>urchased experience it would seem there might have been some appreciation on the part of Congress of the following words of wisdom uttered by Senator Benton : "The government ought not to delegate this power if it could. It was too great a power to be trusted to any banking company whatever, or to any authority but the highest and most responsible whicli was known to our form of government. The government itself ceases to be independent — it ceases to be safe — when the national currency is at the will of a company. The government can undertake no great enterprise, either of war or peace, without the counsel and co o]»oratiou of that company. "The ]»eo])]e are not safe when sucli a company has such power. The temptations are too great, the oppor- go THE EYOLUTIOX OF MOXEY. timitv too easy, to put np and doAvn prices, to make and break fortunes, to bring the whole community on its knees to the Neptunes who preside over the flux and reflux of l>aper." The Senator indicates that he did not realize that it was giving to a company the exercise of the sovereign power to issue money; for both he and Senator Calhoun adA'ocated that the government should issue notes — not as a sovereignty — but as a mere vendor of its credits redeemable at some future time in gold and silver coins. The contention of Senator Benton was what the gold and silver owners claimed was an infringement on their constitutionally secured right; and it was an infringe- ment so long as the intelligence of Congress did not know that the issue of money was the exercise of a sovereign power; that the use of money was its value; and that the value of its use, or its value, as money, depended upon the power of Tender — not the intrinsic worth of gold and silver. Congress, in 1820, submitted a request to the Secretary of the Treasury, asking — among other things — if it was practicable to substitute a paper for a metallic currency. In his answer, the greatest Secretary of the Treasury, W. H. Crawford, said he would not assume that Congress intended to ask him the extent of its powers, ''yet it will necessarily occur to the House,'' he stated, "that if the power of Congress over the currency is not absolutely sovereign, the inquiry, whatever may be its immediate result, must always be without ultimate result." He further stated that "the general prosperity will not be advanced by demonstrating that there is no in- trinsic obstacle to the substitution of a paper for a metallic currency, if the power to ado]eople suffered from 18o7 to 18G1, when the government was called upon to preserve the entirety of its autonomy. Its sovereign powers had to be exerted to their full extent, and to the full capacity of the people. If it was not known what were the sovereign powers of the government ; and if some of them had been regarded and treated as private rights, the error would now be made manifest. The government had the right and power to command all the resources of the country, animate as well as in- animate, for that is what patriotism demands when the life of the country is at stake, and all opposition is treason. If oi)position is animate, it should be banished; if inanimate, it should be confiscated and ai)pro])riated to the defense of the country. No consideration should be given any claim to exer- cise a sovereign power, as a private right, when it oper- ates to the detriment of the peoj)le and of the govern- ment, though it is secured by the Constitution. The blood of the life of the government is freely offered, and, if not ottered, impressed in the defense of the country. Its material resources belong to its i)eople, and, with their lives, are offered oi' im])ressed into its service. There is no Constitution, there are no laws that are entitled to 84 THE EVOLUTION OF MONEY. any consideration, if their enforcement conflicts with the demands of patriotism, A government that can be intimi- dated into forcing patriotism to make sacrifices in the interest of a clasiS to x>reserve its autonomy, is not worth preserving. If patriotism was made to suffer vicariously because the exercise of a sovereign power was erroneously thought to be a private right, and, as such, secured to a class by the Constitution, then when the error is discovered, radi- cal should be the change in the policies and laws of the government regardless of consequences, until the sover- eign power is properly exercised. It was soon evident that gold, silver, and the state bank-notes could not finance the war. Congress was therefore compelled to summon "use-value" to its assistance. This was done — not by the issue of legal-tender notes, as the exercise of a sovereign power — but by the issue of notes payable on demand ; and yet the notes were given the sovereign legal-tender right to be used in the payment of all debts due to or by the government. This action of Congress made the value of the use, or the "use-value," of the "Demand-Notes" equal to the value of the use of gold and silver coin in the payment of all governmental debt ; and this "use-value" made them current with the people, though they were not tenders in payment of private debt. Though the notes were issued as a debt, the practical efi'ect of giving them "Tender," and making them payable only on demand, was the same as if they had been issued as an exercise of sovereign power; for the value of their use, or their "use-value," was such that demand would never have been made by the peoi)le. The coin owners and bankers realized this, and when only sixty millions had been issued, they induced Congress to change the law and retire the notes. In the chanj:e Congress admitted that the issue of money was a private right; that its exclusive exercise THE EYOLl'TIoy OF MOyEY. 85 was secured bv the Constitution and the decisions of the Supreme Court to the gold and silver owners and their banks; and, therefore, that the law should be so changed that the notes could not be used to pay dues on imports, or interest on the bonds. These two uses, however, were more than gold and sil- ver could serve, for the greater part of both left the country, and Avhen an importer needed coins he had to ]»ay from S1.50 to .fi'.So for them in the notes of the gov- ernment during the four years of the war, and for years after. Bpeaking afterwards of this action of Congress, the Hon. Thad. Stevens, a member at the time, said : "Yes, we had to yield — the Senate was stubborn. We did not yield, however, until we found that the country must be lost or the bankers gratified ; and we sought to save the country in spite of the cupidity of its wealthier citizens. When a few years hence the people shall have been brought to general bankruptcy, I shall have the satisfac- tion of knowing that I attempted to prevent it." If the issue of money is the exercise of a sovereign power, and if, in the prosecution of the war, the Govern- ment exercised other sovereign powers to force men to leave home and be shot to death, what greater stupidity and craven servility to the Money Power could be shown than is admitted in the above? Governments, as well as men, however, must act accord- ing to their intelligence. The most patriotic intelligence of that Congress had no a])j»reciation that viler traitors than it regarded the leaders of the South were insolently and dominalingly asserting their constitutional claim to exercise a sover- eign ])Ower as a ]»rivate right — for if it had, those bank- ers would have been thrown into jirisons instead of hec- toring over that ])ody. The profound iegarrovided for the use of gold, silver, and as many notes of the National banks as Congress in its wisdom had deemed 92 THE EVOLUTION OF MOXEY. necessary for their interests, and they began to fit their necks to the financial yoke. When the people were informed that their right to use silver had been previously, in 1873 and 1S74, taken away, and that the money of the country — after the period des- ignated in the act — would be limited to the use of gold and the national bank-notes — pandemonium broke loose. The panic that ensued was worse than that of 1837, when Jackson drove the use of things that served the functions of mone}' to a compliance with the barbarism of the Constitution, for the Eesumption Act restricted the use of things that served the function of money to gold, and such notes as the owners of gold might deem it to be to their interest to put into circulation. All ideas of value disap})eared, and after the general demand that all the obligations of the people should be paid in money — an impossibility — the property of the many was transferred to the few by wholesale. Transportation, and other proj^erties of inestimable value, were gathered in by the few at their own price until there was a concentration of wealth, and i)ossibili- ties of wealth, undreamed of up to that time ; and many of the fabulous fortunes of today had their origin in that panic, and all are indebted to the subsequent enforcement of policies similar to those tliat caused the i)anic. It has never been understood how Congress — l)v a fraudulent codification of an act — could legally take from the people, and the owners of silver, their constitu- tionally-secured right to use the metal as money. The matter seems to have been accepted as one of the many tricks that the Money PoAver plays u]>on the rep- resentatives of the people, when constitutional guaranties bar its effort to increase its wealth. The suffering and loss of the panic was so terrible that the Congress of 1878, in response to the demands of the people, stopped the retirement and cancellation of the government notes bv an act which ordered that thev THE ETOLUTIOy OF MOXEY. 93 should be reissued as often as received into the treasury. This Congress, under the pressure of tlie same intlueuce, restored to the people the right to a partial use of silver, by the act which authorized the purchase of a certain amount each month. This silver was made tender in payment of debt, which gave it a value in its use equal to the value of the use of gold. The situation was therefore relieved to the extent of the Mi] millions of "use-value" government notes that were left in circulation, for they also were tenders in pay ment of debt; and it was further relieved as silver was purchased, and the coins, or paper certificates, were l)laced in circulation. Though silver was supposed to be in part restored to its constitutional right, such was not the case, for the representatives of the people had been tricked again by the Money Power. When silver was demonetized, it was the legal valuator (at 416i/4 grains) of the "word," dollar, the Unit of the Money of Account; and at that valuation it had "use- value"' secured by full tender. Gold at 16 to 1 had been given equal "use-value," which had been secured by giving it full tender, but it was not the legal valuator of the "word," dollar. Since, in the science of finance and the practices of the people, it is use, and not intrinsic worth, that determines the value of gold and silver, it was now necessary to make gold the legal valuator of the "word," dollar, if the intrin- sic-value system was to lie maintaiued, aud 25 8-10 grains of gold was given that distinction. When silver was re- monetized — though it Avas given legal teuder — it was not reinstated, as it should have been, as a legal valuator, at •ilGi^ grains. This 7)laced both the Government and silver in an awkward ])redicament. Silver was given the right to "use-value," by the ])ower of tender — but it was not re- instated to its original right as a legal valuator of tho "word," dollar, and this gave the owners of gold the ex- 94 'J^'HE EVOLUTION OF MOSEY. ciise for claiming tliat the value of the s^ilver dollar was not equal to the value of the gold dollar. It was therefore contended that though the Govern- ment had adopted the gold standard, it was compelling the people to accept silver as a standard of payment ; and to the extent that silver liquidated debt, beyond its so- called intrinsic value, it Avas claimed that it was govern- mental fiat, *. €., financial theft. The Government was in a still more awkward predica- ment with its own notes. It had issued them as a debt jjayable in lawful money, when both gold and silver were lawful money. It had, by giving the notes limited legal tender, endowed them with ^'use-value" for all purposes, except the payment of the interest on its bonds, and the import dues. It had undertaken the payment and retirement of its notes, as was supposed, by the use of both gold and silver, when it was claimed that it could not use silver, because that metal was not a legal valuator; and it was evident — if the notes were retired by the use of gold only — it would end in the legal transfer of the resources of both the gov- ernment and the people to the owners of gold. The people would not permit that then, however willing their officials, and the leaders of the factions, may have been; and they will not j)ermit it to be much longer continued, however far it may have been treacherously carried. Being in this awkward predicament, the Government, through the influence of the Money Power over its offi- cials or because of their ignorance of the science of finance, has been harried with the demand that it make its fiat money, as it is called, as good as their gold : and leaders of factions have viciously fought to induce the people to elect them to office, that they might carry out this mandate of the gold owners. No one has been elected President, whether democrat or republican, that the gold owners did not think, or THE EVOLUTIOX OF MOyEY. 95 hope, would act in their interest; and they must have hiughed as thev saw how flercely ignorance and cor- ruption were willing to fight for the loot they were anxious to pay for the faithful service of exercising the dominant Sovereign Poicer of the government, as their private right. The naked, or serviceable, use of 34G millions of green- backs, and the use of silver — as it was placed in circula- tion — deprived the gold owners of that much use of their bank-notes; and to the extent they lost this use, they lost the value of that service which they claimed as their constitutional right — forgetful that the right of the own- ers of silver to this value was once as sacred as theirs. The naked use of the "Greenbacks," and the use of silver, was not only depriving the bankers of the value of the use, or the "use-value," of their bank-notes, but the use of the two, and the use that the people Avas nuiking of the national bank-notes was fast enabling the people to pay the bonds. This was destroying the scheme of the "best banking system the world ever saw;" and the gold owners became desperate. They had not been idle, how- ever. When the Congress of 1878 partially rehabilitated silver, they waged war upon the "Greenbacks." Though the "Greenbacks" — when issued — may have had the right to tender, and by reason of that right could be used to pay debts contracted after they had been issued — as had been decided by the Su])reme Court — it was con- tended tliat they could not be used to pay debts con- tracted before they were issued. This gave an excuse to reopen the whole question of "Tender," and cases on the docket were taken advantage of to have the Supreme Court decide whether Congress had the power to issue notes, and make them tenders. Though the Court decided in the Legal Tender Cases that Congress had the power to issue notes, and make them a tender; though it held tliat the value of the use of the notes, or their "use-valiu',"' was separate' and iiid;'- 96 THE EVOLLTIOy OF MOyEY. pendent of intrinsic-value; tliougli it held that Congress could utilize "use-value" by making the notes of the gov- ernment full tenders; and though its reasoning intimated that the issue of money was the exercise of a sovereign power, it was content to Anally hold, though Congress could issue notes and make them valuable in use, it could not create value, and, therefore, the notes, while entitled to "use-value" for a time, were a debt of the government that must eventually be paid in gold. The Supreme Court, therefore, in eflect, decided that M-hile Congress had the power to create "use-value," and let it serve the people indefinitely, it also held that the "use-value" of the notes was dependent upon their redemption in gold. This phase of the decision must have been taken advan- tage of to legalize the "Gold Keserve;" but its origin had not waited for the decision, for a Secretary of the Treas- ury had been induced to assume that the use of the "Greenbacks" had no value, unless they were based upon gold. Therefore, in order that the "Greenbacks" might have "use-value," and justify the government's conduct in leaving them in circulation, a large amount of gold was bought and held in idlenass in the vaults for the purpose of supi)()rting their "use-value." This furnished a market for the gold, and when it could not be more advanta- geously used by the financiers, the government was im- posed with the burden of carrying it. The profits that could be made out of this now legal- ized "Gold Reserve" were not duly appreciated; and the gold owners and bankers unwittingly made a move that, in its legal result, should have destroyed their claimed right to a Gold Reserve Fund. The service that the use of the "Greenbacks," and the use of the increasing silver, was rendering the people — in addition to paying the public debt — kept their property and the fruit of their labor — to a great extent — out of the possession of the gold owners and the bankers. The protective use of the "Greenbacks" to the people, THE EVOLUTION OF MONEY. 97 and their detrimental use to the interest of the gold own- ers and the banks, was resented, and it was decided to make another effort to drive them out of circulation. It was, therefore, contended — though Congress might have the power to issue notes and make them a legal- tender — that the tender was lost when they were paid into the treasury ; and it was further contended that when they were reissued under the law of 1878, they did not have the right to the "use-value" which the power of legal tender gives them. A case was made and carried to the Supreme Court for adjudication, and ^\iien it decided that Congress had as sovereign a poAver to make money as other nations, and as much right and power to make paper notes, money, by giving them full tender, as it had to make gold, money, by giving it full tender, it was at last officially admitted that the issue of money was the exercise of a sovereign power — not a private right; and, therefore, there was no longer any reason in law, or in practice, for a Gold Keserve to ensure the ''use-value" of the "Greenbacks," The Supreme Court, in Juillard vs. Greenman, 110 U. S. Kep., 421, virtually decided that the issue of government notes, impressed with the full tender power, made them the official representatives of the "words," dollars, dimes, cents and mills which compose our "Money of Account ;" and since those "words" are only used to express the unit of labor, its subdivisions and multiples; and since the scientific expression of use, or lahor value, is the legal ten- der notes — and not gold coins — and since their only value is, and must be, in their use, the only value that should be known to the law is the "use-value" of the notes of the government. The value of labor, therefore, when officially recognized, and exjiressed in full legal-tender government notes, is the equitable, and scientific, standard of measure; meets 98 THE EVOLUTION OF MONEY. the theories of Sir James Stewart ; the teachings of Adam Smith; explains the advantage of the practices of the Banli of Venice and all other banks, and is the only method which will protect the people from the spoliation of class nnder the intrinsic-value svstem. CHAPTER VIII. HE Supreme Court of the United States finally decided that the issue of money is the exercise of a sovereign power — not the exercise of a private right, as was erroneously supposed by the framers of the Constitution. This decision followed, logical!}' and scientifically, the action of Congress, which deprij-ed 4161/4 grains of silver of the right to be used as the legal valuator of the "word," dollar, and therefore of its constitutional right to be iLsed as a standard of jjayment. Silver was eliminated because it and gold, after they surrendered to bonds the service of supporting bank- notes, had lost so much value — in the loss of that service — that even when impressed with the full tender power, their intrinsic worth — as it was called — could not be held up to their legally assigned value; and it worked injustice to compel the creditors to accept them as standards of I)ayment. Therefore it was assumed — since the service left to be performed was so small, that the use of the two metals cheapened tlie value of the service of both, until their joint use worked an injustice to the creditors — that it would be better to cease the use of one, and, thereby, maintain — not the use, or money — but the claimed intrin- sic value — of the other. The error lies in the assumption that the elimination of the use of one of the metals tends to maintain only the intrinsic-value of the other. The intrinsic, oi- inherent, value of gold and silver coins is the value of the use that can be made of them, as com- modities, and has notliing to do with the use, i. e., service, that is made of them as money. Their use, as commod- ities, is so different and so separate from their use, as 100- ^'^^^ EVOLUTIoy OF MO^EY. money, and the fact that, as commodities, they are so cumbrous it unfits them for the performance of the money service, has caused the use of one to be dis- carded in the hope that the use — not the intrinsic — value of the other could be maintained; but notwithstanding gold was left in the exclusive right to the use, /. e.^ service, and given the legal-tender power to enforce the right, the necessity for expeditiousness and efficiency in effecting exchanges has, in practice, compelled it to surrender the performance of the service to government notes, bank- notes, and the credits of the people. What are the uses, i. e., services, now made of gold which support its value — as money — since it is use, I. e., service, as money, and not use — as a couiniodity^thiit gives it the value which makes it the standard of value? Gold long since began to lose its value, as money, when it and silver surrendered at first to bank-credits, and then to bank-notes, their use, /. e., right to serve, as actual current money. It and silver lost so much value when they had to give up this service that they would have ceased to be used, or considered as money, if they had not been given that power Avhicli compelled everyone to accept them, at an assigned valuation, in the payment of debt, i. c, the 1)0 wer of Tender. They enjoyed the value of the service that legal tender exacts, until they were available (mly in the retail trade, in the settlement of balances in the wholesale trade, and for the support of bank-notes — all of which services did not conduct more than five per cent of the volume of busi- ness, at the time Sir James Stewart wrote. They inefficiently performed these services, or served these uses, until they had to give up to bonds the service of supporting bank-notes. This restricted their use to the retail trade, and the settlement of balances, when they became so plentiful that the power of legal-tender would not preserve their assigned value, and the use of one had to be eliminated. Even after the elimination of silver, the THE EVOLUTION OF MOSEY. IQl use of gold was curtailed until it did not conduct 3 per cent of the volume of business ; and in New York City, it is claimed, gold is not now used in the conduct of one-half of one per cent of the volume. • Gold is not used to support bank-notes, for the.v are issued on bonds. It is not exclusively used as bank- reserves, for silver and credit currency may be, and are, so used. It is not used in the conduct of the retail trade, for rliat is conducted by subsidiary silver currency, credit currenc}' and bank checks. It is not used in the settle- ment of balances, for they are settled by credit currency, silver currency, and bauk checks. It is no longer exclu- sively used to pay import dues and the interest on the government debt, for in practice, they are in great part paid by credit currency, silver currency, and bank checks. In fact, gold no longer has any practical use, as money, and since its value, as money, depends on its service, as money, it practical ij has no value, as money : and its only value would be its use as a commodity, did not the Gov- ernment give its owners the right and power to demand that the obligations of the people, the government notes, the silver coins, the silver-certificates, and the bank-notes must all be paid with gold coins, whenever they deem it to be to their interest to make the demand. It is this power, and the ever-present fear that it will be exercised by a few malefactors — irho have a corner on its exercise — that is the cause of the undue value of gold. This is a concentration in the hands of a few of the right to exercfse, and mani])ulate, as a private privilege the sovereign ]jower to issue money, after it has been offi- cially declared that it is the exercise of a sovereign jtower. It is the exercise of a sovereign power that nuikes the foulest of plutocracies when exercised as a private graft, as is already indicated, and the i)ower has not borne full fruitage. If it is the exercise of a sovereign power, why does not Congrass exercise it as such a power should be exercised. 102 'iHE EVOLUTION OF MONEY. iu the equal interest of all the people iu fact as well as in theory? This power, coming down through the centuries chained to gold and silver, has so long and so dominantly been exercised as a private right, that the statesmen, the economists, the scientists, the corporate church, and even the victims themselves have feared to contend that it should be exercised as a sovereign power, for such conten- tion is stigmatized as treason to the government, error in political economy, vagaries of the scientists, heresy in the church, and crankiness in the deluded victims. statesmen, therefore, who are chosen to exercise the sovereign powers of the people, have been easily induced to believe that the Supreme Court's decision, viz : that it was the exercise of a sovereign power, may be true in theory, but too dangerous in practice to be entrusted to any such aggregation of men as w^ere ever selected to ex- ercise sovereign .powers. The statesman concedes it is a private right, and, with apologies for the decision, refuses to exercise the sover- eign power, but acts in obedience to the instructions of the financiers. The economist has delved among the practices of the people for the truth as to the nature and causes of wealth that he might propose principles which, when made rules of action to govern their practices, would stop injustice, but fetish worship of the metals has blinded his vision. The scientist set forth the true theory for the issue of money, and left it to statesmen to adopt it in the policies of governments. Corporate church — not religion — has ever been the hand-maiden of gold, and sets its seal of dis- approval upon all who hold that the issue of money is the exercise of a sovereign power, because it is an attack on the gold standard. Therefore, the principle enunciated by the Supreme Court of the United States in Juillard vs. Greenmau. viz: that the issue of money was the exercise of a sovereign power, has not been accepted. THE EVOLUTION JJF MONEY. 103 The Mouey Power had a few of its ablest industrial slaves to contend that the court was in error; and as, at that time, it had under its control the leaders of both the Kepublicau and Democratic factions, no acceptance was given the decision except by the few who organized and made a canvass for the control of the government under the leadership of the Hon. Peter Cooper, and the name of the "Greenback Party.'' That party was so easily ridiculed to death by the com- bined jeers of the two factions, that all consideration of the decision was dropped; and the determination of the gold owners that their exclusive right to the benefits that accrue from the exercise of the sovereign power to issue money should not be disturbed, made them more insolent, and more domiuantly corrupt than before the decision. The Kepublicau party was fairly respectable at that time. It had its good traits as well as factional weak- nesses. It had taken control of the government and brought on the war. Its purpose was to relieve the country from the evils of a land and slave aristocracy. It had no idea that it was being used to take the govern- ment from the Southern aristocracy of land and slaves to turn it over to an Eastern and Northern plutocracy of money and industrial slavery. It had no appreciation of the fact that the issue of money was the exercise of a sovereign power; and that the supremacy of the Southern aristocracy had been due to the service of the slaves and the use, i. e., service, of the notes of state banks ; and that this, supremacy Avas more and more disputed, as money accumulated in the East and realized its inability to make industrial laboi- i)rofit- ably compete with slave labor. The Hon. Thad. Stevens, in his admission, discloses that he had no appreciation of the fact that the issue of money was the exercise of a sovereign i)0Aver, for if he had been so convinced, he would have filled the i)risons at AVashington with the bankers Avhen they came there to in- 104 THE EVOLUTION OF MONEY. timidate Congreiss into imposing vicarious suffering upon patriotism for their profit. President Lincoln did not realize that the issue of money was a sovereign power, when he was urging Con- gress to issue "Demand-notes" instead of bonds so thai he could quickly command the resources of his people, and overwhelm the enemy before they could prepare for resistance. He felt that the Government should exercise the right, and when he was compelled to respect the demands of the bankers, and his prescience could see the distress their manipulative oppression would cause, he gave utterance to that historic plaint of his forebodings of the evils which would be visited upon the people. The Republican party, therefore, while not antagonistic to the Money Power, favored other interests. Its favorites were the beneficiaries of the tariff. It based its hope to continued control of the government upon the assistance of the tariff' beneficiaries. It taught labor to believe that it favored the manufacturers solely in order that they might be able to pay the laborers higher wages. The manufacturers and the industrial slaves kept the party in power, for the Money Power was satisfied with the consideration it was receiving, and most of them sup- ported it also. But there came a time when the interests of the tariff" beneficiaries and the interests of the Money Power conflicted. The effort to protect the manufacturers, and their in- dustrial slaves, with a tariff' bore so heavily upon all other classes, that the treasury was kept filled with money over and above the amount required to pay ex- penses, and meet the requirements of the sinking fund for the payment of bonds. The Money Power did not want the surplus used to pay the bonds, but the remnant of original honesty in the Eepublican party did not know anything, except to use the surplus to pay the bonded debt. THE EVOLUTION OF MONEY. 105 It became necessary, then, for the Money Power to pro- tect its interests against the use of this surplus money which the tariff was producing, and its leaders unad- visedly, if not thoughtlessly, turned to the Democratic party and assisted in the election of Samuel J. Tilden President. The Eepublican party acceded to the demands of the bankers during the war, because they were apparently supported by the Constitution ; and it did not know what else to do but respect the provisions of that instrument, even though it worked injustice. But this act of treachery — turning the control of the government over to the Democratic party, dominated as it was by the leaders of the Southern ariiStocracy — was more than patriotic intelligence could stand; and it de- cided that party should not take charge of the govern- ment. The Money Power sneaked back into the Kepul)lican party, though it continued its favoritism to the manufac- turers and though the surplus was used to pay bonds until President Arthur stated that all would be paid be- fore they matured. Its leaders did not see the real effects of the tariff. They fatuously believed that in its gtMieral results it was beneficial, though it bore hard upon many; claiming that it enriched the country, enlarged its capacity to supply its own wants; made it independent of other nations for the sustenance of its people; improved its in- dustrial laborers by paying them better wages than wore paid elsewhere; and that the country would, therefore, be the better able to defend itself in the event of war. But it ignored the fact that the tariff was not judiciously levied, and, ais a consequence, the members of the class, known as the Money Power, had increased their wealtli. The manufacturers were enabled to make so much money that they were necessarily impelled to change I'l-oin the tariff to the money class, to ])rotect and jn'cscrvc their wealth. As the money class has been enlarged by recruits 106 '^'^^ EVOLUTION OP MONEY. from the tariff, and the other classes, it has grown in strength until it is all-powerful. This enlargement of the money class had not attained the proportions of today, but it had received sufficient accessions to encourage it to make another effort to pro- tect its banking system; and since it could not get the Eepublican party to reduce the tariff, to cease the pur- chase of silver, or to retire the "Greenbacks" — pol- icies that were operating to pny the bonds, and otherwise injure their interests — they turned to the Democratic party for assistance, and elected Grover Cleveland Presi- dent. He did all he could when he ordered his Secretary of the Treasury to buy only the minimum, not the maxi- mum, amount of silver each month. The surplus accumulated, and, however averse the Money Power was to its being used to purchase bonds, some of it Avas so used to get the money back in circula- tion. This, and the inability of the leaders of the party to do for the Money Power what they wanted done, induced it to assist the Republicans to elect Benjamin Harrison President. He was a disappointment to the Money Power, for he not only used the surplus to pay the bonds, but he so used all of it, and did not leave a part of it on deposit in the banks, as had been done. During his administration he paid 252 millions of bonds, notwithstanding he expended 100 millions more in the payment of pensions than Presi- dent Cleveland, The pension increase was the first intimation of the policy that has been adopted to dis.sipate the surplus so that it could not be used to pay the bonds, which has develoi)ed into the present expenditures. President Har- rison thought that it was better and more patriotic to in- crease the pensions than to squander the money of the people to save the banking system — but he would not de- posit the surplus in the banks so long as he could use it in paying the bonds. THE EVOLUTION OF MONEY. 107 Neither part}- liked tlie altitude of the goverumeut towards silver. The owners of silver, and a fai-tiou of the ]Jemocratic part^-, wanted it restored to its constitutional right, as a legal valuator, and given ••use-value" equally with gold. The Money Power, the Eepublican party, and the fac- tion of the Democratic party, led by Mr. Cleveland, wanted it driven entirely from circulation ; claiming that the country was on the gold standard, and that it was wrong to give silver the power of the Tender, as a legal valuator of the ••word," dollar, at the ratio of IG to 1. The vSilver re]»ublicans and the Silver democrats joined against the Money Power, as it mustered the Gold repub- licans and the Gold democrats to its defense. The issue was in doubt until the Money Power secured the adherence of the Silver republicans, by the agreement to buy the yearly output of silver, at the valuation of 41614: grains to the dollar, as was supposed. In consideration of this agreement of the Money Power to have its republican and democratic cohorts use the money of the people to buy their annual yield of silver, the Kepublican silver owners agreed to assist in passing a law that established the gold standard. This law is known as the Sherman law, and is not open in its terms, for if it had been it would never have l)een passed. In the first place, it tricked the Silver repub- licans, for under its provisions they were only paid the commodity price of silver, and not its -tlOi/4 grains to the dollar value, a.s they understood when they made the agreement. In the second place, it tricked many who voted for it, in the provision that the Secretary had the option to pay the certificates — issued for the purchase of silver — in gold or silver; for they did not know that the obligation ••to maintain the parity of the two metals" would make it obligatory to pay them with gold coin only. Having secured the passage of the Sherman law during ]\Ir. liar- 108 THE EVOLUTION OF MONEY. rison's administratiou, they proceeded to put its hidden iniquities iuto effect. The owners of silver — as soon as they received the cer- tificates — presented them for redemption in gold, and the bankers bought up the "Greenbacks" and presented them for redemption in gold, also. The purpose of this — and the Sherman law was framed for that purpose — was to distress the government in its Gold Eeserve, until it and the people would be willing that both the "Greenbacks" and silver should be deprived of "use-value,'' retired from circulation, and all the "use-value" of the country turned over to the gold owners and bankers. This was to be accomplished by withdrawing the "Greenbacks" and the Sherman notes from circulation, and use them so incessantly and continuously to raid the Gold Eeserve, that the Government would be com- pelled to sell bonds to buy gold until the people would be so distressed in their private affairs, and so burdened in public debt, that they would agree to anything to get relief. Mr. Harrison was too able a lawyer, too patriotic a citizen, and too honest a man to be used for any such pur- pose, and he continued the purchase of silver, the re- demption of the "Greenbacks" only, with gold, and the payment of bonds with the surplus. While he was using the surplus to pay the bouds at the rate of 252 millions for his administration, and refus- ing to deposit any of it in their banks, the Money Power redoubled its efforts to exhaust the Gold Keserve, so that they could force him to issue bonds to purchase gold and replenish the reserve, which they were criminally exhaust- ing. They went so far, in anticipation of their intention to exhaust the Gold Eeserve, that they induced his weak, if not complaisant. Secretary of the Treasury to have the plates for the issue of the bonds prepared while Mr. Har- THE EVOLUTION OF :,IOXEY. 209 risen was absent from Washiugtou, so that they would lose uo time in having bonds issued before another ad- ministration was elected, for it was at the end of his. When he Avas acquainted with the subservient, if not dishonorable, part he was expected to play — if he wished to be re-elected — he refused to order the bonds to be issued, and the raids upon" the Gold Eeserve ceased, for nothing was to be gained from him. The Republican party had indicated its intention to renominate Mr. Harrison, and the Money Power turned to the Democratic part}' for assistance, and helped it elect Grover Cleveland a second time to the presidency. That party thought it was going to repeal the Sherman law, or at least the part of it which obligated the govern- ment to preserve the ''parity of the metals," and, thereby, relieve the Gold Eeserve of the obligation of having to pay the silver certificates — for the platform of principlcis so read to common intelligence. Mr. Cleveland, and his faction, after he was elected, did not so construe the platform, but contended, inas- much as it obligated the party to preserve the ''parity," that it was an endorsement of the Gold Standard. Mr. Cleveland was correct, for the platform had been written both ways — one to catcli the voters — and it had caught enough — the other for Mr. Cleveland and the representa- tives of the 3Iouey Power, both Democrats and Repub- licans, to enforce. The Sherman law was sustained, and the raids were so incessant, and so profitable, that when 1(13 millions of bonds had been sold to his financial friends privately, through the agency of a former law partner at prices far below their market value, the people denounced him so bitterly, and so seriously questioned the honesty of his conduct, that they forced a public sale of the next 100 millions, at a much higher price than the others brought, but the gold standard was finally secured. XIO '^HE EVOLUTIoy OF ^lONEY. It was a desperate fight on the part of the gold owners and bankers to secure for their exclusive l)eneflt the "use- value"' that the government had given the people in the service of 378 millions of silver, purchased under the law of 1878, as it was being enlarged by the government notes, issued in the purchase of silver under the Sherman law of 1890. The fight was so desperate on the part of the gold ow^ners, and bankers, backed up by the President and the leaders of the Money Power in the Republican and Democratic parties, that it was fatally destructive to the people, for they had to fight without money, while it was being used to destroy them. It was merely the manipulation of money by the gold owners, and bankens — through the power of the gov- ernment as it was exercised by the President and Con- gress — to force upon the practices of the i)eople the ac- ceptance of the Money Power's claimed constitutional right to be the exclusive beneficiaries of all "use-value," notwithstanding Congress had bestowed "use-value" on silver for the benefit of the people; and the "Greenbacks"' were used to help win the fight, notwithstanding the Supreme Court had decided that they were as much en- titled to "use-value" as gold coin. The excmse for this fight that pauperized the people, depopulated States, and caused untold misery, was the preservation of the Gold Fund ; a fund that was unneces- sary even before it was legalized, and the law for which was virtually abrogated Avhen the Supreme Court decided that the "Greenbacks"" were as much money as gold coin. What principles of law and of government were asserted by President Cleveland in saving to the gold owners and bankers, under his maintenance of the "parity clause," the value of the service that the "Green- backs,"' silver, and silver certificates were rendering to the people? First. — He asserted that the issue of money was a pri- THE EVOLUTION OF MONEY. HI vate right — not the exercise of a sovereigu power — not- withstanding the tSupreme Court had decided that it was the exercise of a sovereign power. tSecond. — He asserted that when Congress deprived the owners of silver of their constitutionally-secured right to use their metal at the value of 41<>i4 grains to the dollar, as standards of payment, it performed an act that wa.^i legal and binding. Third. — He asserted when the Congress of ISTS partly restored to silver its right to "use-value"" by giving it legal tender, but not the right to be used at the value of 4101/4 grains to the dollar, that it was an infringement of gold's constitutionally-secured right to all "use-value."" Fourth. — He asserted — when the Congress of 187S obeyed the mandate of the people and ordered the reissue of the "Greenbacks," which compliance the Supreme Court decided gave them as much right to legal tender, or "use-value,"" as gold coins — that it was nevertheless an iu- f I'ingement upon the right of the owners of gold to all legal lender, or "use-value;"' and that the "Greenbacks"' had no right to legal tender, or "use-value," except as they acquired it from the right to be paid, or redeemed, out of the Gold Keserve, notwithstanding the court had decided they were as much money as were the gold coins. Fifth. — He asserted — when the Congress of ISOO au- thorized the purchase of a large amount of silver each year by the issue of certificates which could be used by the people — that it also was an infringement upon the ex- clusive right of the gold owners and bankers to all "use-value," and if they could not be protected in the enjoyment of their constitutionally-secured right, except by working the "parity"" trick, he could l)e relied on to bring the country to a realizing sense of the sacredness of their rights, even if he bankrupted the government, depopulated some of the States, and pauperized the jicople. CHAPTER IX. INCE the issue of mone}', according to the latest decision of the Supreme Court — as it has en- deavored to make the laws square with the prac- ticevS of the people — is the exercise of a sovereign power; and since the exercise of that power dominates the exer- cise of all the other sovereign powers, is it not essential that Congress should devise a way to exercise said power in the interest of all the people? If the most dominant of the sovereign powers cannot, or ma}' not, be exercised in the equal interest of all the people by the body that is chosen to exercise sovereign powers, is this a democratic or republican government? Is it not merely a plutocracy of money and industrial slavery, masquerading as a democracy, or a republic, under the rule of a few financiers? If it is denied that it is a plutocracy ; if it is denied that the issue of money is the exercise of a sovereign power; but, on the contrary, contended that it is the exercise of a private right that has been enjoyed for over a century imder a republican or democratic form of government that shall not be changed, then the anarchists lower down the scale of life may be expected to assert their rights against the anarchists at the top. But the right to exer- cise the sovereign power to issue money is not the only advantage that the government has given the anarchists at the top. It has heretofore been stated that the States reserved the exclusive power to grant charters, and the exclusive right to exercise control over them; and that this power and right was secured by the constitutional provisions, which restricted the enjoyment of the privileges of the THE EVOLUTION OF llOXEY. 1I3 States, and the right to the jui'isdictiou of the United States courts, to ''citizens" of the States in order that corporations might be excluded. It has also been stated that Congress — in the interest of the gold and silver owners — infringed upon the re- served power of the States to grant charters, by granting a charter for a bank with authority to issue notes; and that the Supreme Court infringed upon the exclusive right of the States to control their corporations, when it decided that the grant of a charter was a contract, and, as a corollary, that corporations were citizens. The Supreme Court not only made the corporations of the States '"citizens," but it made them of much higher importance than the citizens, for it made them quasi-state sovereignties, when it decided that the grant of a charter was a contract. As quasi nstate sovereignties, the court guaranteed that they should exercise their charter- acquired rights, free from interference, regulation, or control of the States. Therefore, if a State should inadvertently, ignorantly, or corruptly grant a charter to a corporation, in which was included the exercise of one of its sovereign powers, or the right to a joint exercise of one of its sovereign powers, it could never regulate the exercise of the charter rights excejjt by the consent of the Supreme Court. It will not do to say that the legislatures may not grant the exercise of sovereign powers to corporations, for that implies the sovereign powers of the States are so well known that the courts would detect the error, . The cause of the suffering that afflicts the people is the ignorance of Congress as to what are the sovereign powers of the I'nited States; the ignorance of legislatures as to what are the sovereign jtowers of the States; and the ignoi-ance of the Sui)reme Court as to what are the sov- ereign powers of both the I'nited States and the States, and what are its own pOAvers. 8 114 2'-^^' EVOLVTIOy OF MOXEY. From some of its decisions it appears that the court is of the opinion that all sovereign power was finally lodged in it, onh- to be exercised b}- Congress and the States as it might suggest, and would permit. It took the intelligence of that court over one hundred years to ascertain that the issue of money was the exercise of a sovereign power. This negligence was, in great part, due to the fact that the framers of the Constitution for- bade the States to emit bills of credit, and attempted to withhold the exercise of that power from Congress, in order that the claimed private right of the gold and silver owners to issue money might not be infringed. If it took the Supreme Court one hundred jearn to find out that the issue of money was an exercise of the sover- eign ijower, is it not jiossible that the exercise of some of the charter powers, that it decides are contracts, are State sovereign powers which the legislatures could not and should not grant, and that it is destroying the form and changing the spirit of government? The framers of the Constitution knew that the States could exercise their sovereign power to tax, and to impose a tariff upon anything imjiorted from foreign countries, or carried from one State to another, but they did not think it wise to leave them the right to exercise that power, because it might be unfairly exercised to build up certain States, and to enrich the people of certain States at the expense of the people of other States. The framers of the Constitution were afraid that the States might attempt to exercise the power, even after it was agreed that it was best for all that they should give it up, and they cauvsed the Constitution to read that Con- gress shall have the exclusive right and power to regulate commerce with foreign nations, between the States, and with the Indian tribes. Therefore if the States were to attempt to exercise this power, under conditions which made it seemingly neces- sary. Congress, as the over-lord of interstate commerce, THE EVOLUTIOX OF MOSEY. 115 and the protector of the interests of all the people, would intervene, and regulate the matter, i. e.. determine what might be done so as to preserve just treatment of the peo- ple in all the States. In this distribution of the exercise of the sovereign powers of the people between Congress iind the States, there was a well-founded fear that one or both might assume to exercise the sovereign powers of the other. This would produce a conflict between Congress and the States that would prove fatal, unless there was a wise provision for its settlement. The Supreme Court of the T'nited States was origi- nated to act as the tinal arbiter in all such controversies, and the patriotism and wisdom of its members was intended to be the Iiighest guarantee that could be devised, to secure to Congress and the States the enjoyment of the exercise of the sovereign power that had been bestowed upon the one and reserved by the others. When the States have exercised sovereign powers in violation of the interstate-commerce clause, it was an infringement upon the exclusive right of Congress ; and if it injuriously affected any of the people, it was an un- lawful invasion of constitutional rights. These aggrieved individuals have the right to apply to the Federal Courts for relief; and it has so long been given them, more from what Avas assumed the wanton and abusive exercise of power than from the erroneous exer- cise of sovereign powers surrendered to Congress, that they do not now recognize any sovereign power in a State, if its exercise injuriously affects ])rivate interests. When either Congress or the States have erroneously or projjerly exercised any of the sovereign powers of the j)eop]e, and the matter has been presented to the Supreme Court, it has not considered whether the exercise was that of a sovereign ])ower, which the one or the other had the right to exercise, but only whether it was an invasion of private rights — until the exercise of poA^er by either llg THE EVOLUTIOX OF MOXEY. has ceased to be considered as the exercise of a sovereign power, if it injuriously affects private interests, especially the interests of corporations. Congress and the States have so long acquiesced in this usurpation, that what are the sovereign powers of the States, and what are the sovereign poAvers of Congress may only be determined from the decisions of the court, if they can be determined. If Congress and the States, in the proper exercise of the respective powers necessary to preserve their exist- ence, should injuriously affect the interests of some of the people, could the Federal Court give relief to an aggrieved individual on the ground that it was an invasion of his constitutionally secured private right? If the court should decree the relief, and Congress and the States, either from respect or from any other motive, should acquiesce in the decision, then all sovereign power is finally lodged in the Supreme Court, and we have a government unknown to the science of governing people. If the Supreme Court is not bound by acts that are the proper exercise of sovereign powers, and can nullify them whenever they injuriously affect its favorites, then why continue to talk about the sovereign ])Owers of govern- ment ? Why not admit this is not a republic — not a democ- racy — not a plutocracy of money and industrial slavery — but merely a dynasty of financiers that the Supreme Court has developed out of the Constitution for the pro- tection of corporate interests? The interstate-commerce clause was intended to confer on Congress the exclusive exercise of the sovereign power of all the people, in the regulation of commerce between the States. In the indulgence of its exclusive right to exercise its sovereign power to regulate commerce, the action of Congress, however much it may injuriously affect private interests, is independent of any action of the Supreme Court. THE EVOLCTIOS OF MOyEY. X17 If the States, however, s^hould attempt to exercise the sovereigu power to tax inipoi-ts or exports, or producti? carried from oue State to another, it would be both a violation of the private rights of the individual, if injuriously affected, and of the exclusive right of Con- gress; and the Supreme Court could correct the State, either at the complaint of the individual, or of some offi- cial representative of the government. The Supreme Court has not been content to discharge the dignified duties assigned it, but, utterly ignoring both the right of Congress and of the States to uncontrollably exercise their respective sovereign powers, has assumed that neither had any independent nor sovereign powers they could exercise, if the exercise affected so-called private rights. It has also assumed, if private interests were affected by the exercise of power, the exercise could not be that of a sovereign power ; and, therefore, any exer- cise of power that affected so-called private rights could be regulated, modified, or nullified, as it deemed wisest and bast. If the court could assume to regulate the exer- cise of sovereign powers by Congress without dissent, what show did the States have to retain the right to exer- cise any of their reserved sovereign powers, free from its supervision? When Congress, by the grant of a charter to a l)ank, assumed to exercise in the interest of the gold and silver owners, one of the sovereign powers which the States refused to give to Congress, the conflict between the soa-- ereignties could only be adjusted by the Supreme Court. The State of Georgia properly exercised its sovereign power to tax a bank to which Congreiss had Improperhi exercised its sovereign power to grant a charter of incor- poration. The Supreme Court was virtually asked to decide whether the State or Congress had the exclusive right to exercise the sovereign jiower to grant charters of incor- poration, but it never saw the real issue in the case ; and 118 THE EVOLUTION OF 2I0NEY. instead of eoutsidei-iug the case — as was constitutionally intended — it resorted to a subterfuge to acquire jurisdic- tion that it might befriend the bank. — Bank vs. Dcveaux, 5 Cranch ( S. C. Ivep.), 01. This Avas the first of the long line of decisions that has taken from the States the exclusive exercise of their re- served soA'ereign powens over their corporations ; a power which it was thought had been secured in the constitu- tional use of the word citizen, to exclude corporations from the right to the jurisdiction of the Federal Courts. Congress, a second time, infringed upon the reserved right of the States to exclusively exercise the sovereign power to grant charters of incorporation, when it sold to the owners of gold and silver a charter for the Second Bank of the United States, with authority to issue notes. The State of Maryland went farther than the State of Georgia, for it properly exercised its sovereign i»ower when by taxation it drove the branch of the Congras- sional bank out of the State, as an unconstitutional insti- tution. This action of the State created a conflict over the right to exercise sovereign power, as it had been fore- seen and provided for in the Constitution — and for the peaceful settlement of which the Supreme Court was organized. In this conflict between the State of Maryland and Congress over the exclusive right to exercise the sovereign power to grant charters of incorporation, the Supreme Court was called upon to discharge its high constitutional duty and settle the controversy. — McCuUongli vs. The State of Maryland, 4 Wheaton (S. C. Eep.), 313. If the right to tax was the exercise of a sovereign power the State should win, for in the case of the First Bank vs. Dcveaux, the Supreme Court had admitted that this power of the State was absolute, uncontrollable, and supreme; and that there was no way to escai>e un- just taxation except by the election of a legislature which would do exact justice to all. THE EVOLUTIOy OF MOXEY. 119 If the right to grant ehartens of incorporation was the exercise of sovereign jjower the State should win, for the exercise of that power was withheld from Congress, and expressly reserved by the States. If the right "to emit bills of credit" was the exercise of a sovereign i)ower the State should win, for though the States were exijressly denied the exercise of that power, it was no less well known that its exercise had been withheld from Congress; and the issue of notes by a bank is the emission of "bilLs of credit." If the power to tax, if the power to grant charters of incorporation, and the power to emit ''bills of credit'' are the exercise of sovereign powers, then the State of Maryland had the right — in the exercise of its sovereign power to tax — to force the bank out of its limits, since Congress had neither the right nor power to create the bank or to authorize it to issue notes. The reserved sovereign powers of the States — as pro- vided in the Constitution — would give the i)eople ample protection from the aggressions of the Mone,y Power, so long as they were recognized and regarded as sovereign powers. But if their sovereign powers could be, in a sense, changed to civil contracts ; and, whether they were sovereign powers, or civil contracts, be determined only by the Supreme Court, it would be plain sailing for the Money Power so long as it could control the intel- lectuality of the Court. This change of the sovereign powers of the States to civil contracts — when combined with the exclusive right to the benefits that accrue from the exercise of the sov- ereign poAvers to issue money, and to impose a tax on imports — is called Federalism, Whigism, Republicanism, /. €., concentration of the sovereign powers of both the States and Congress in the hands of the Money Power; and is the Plutocracy of Money and Industrial Slavery now dominating the country. The case of the State of Maryland was, therefore, ad- 120 ^'-^^^^ EVOLUTIOX OF MONEY. visedly held up imtil the case from New Hampshire — known as the "Dartmouth College'' case^conld be so de- cided that it might be utilized to change the sovereign powers of the States to civil contracts, which was, to all intents and purposes, done when the Supreme Court de- cided that the exercise of the sovereign power necessary to the grant of a charter of incorporation, was such a contract as w^as protected by the clause of the Constitu- tion that no State should pass a law impairing the obliga- tions of a contract. Thus may be seen how a court, created to sit in final judgment on controversies between sovereignties — as to their respective rights to exercise sovereign powers — was too partisan to realize the high purpose for which it was created, or too unpatriotic to care how it discharged its high constitutional duties. Having decided that any of the sovereign powers of a State which might ignorantly, inadvertently, or corruptly be granted to a corporation, were by the grant changed to a civil contract, the bank could safely call the Maryland case for trial. It was, therefore, no cause of wonder that the Supreme Court ignored the sovereign powers of the States, and decided that Congress had — not only the right to exercise the sovereign power to grant a charter of incorporation to the bank — but the right to authorize the bank "to emit bills of credit" — the exercise of the two sovereign powers that were withheld from Congress. It not only decided against the States — in the conflict over the right to exercise sovereign powers — but, as it was necessary to protect the bank, it modified its former decree in the Deveaux case — as to the absolute right of a State to tax — and held that the State could not exercise this (Sovereign power if it operated to destroy the corpora- tion which the Court was pleased to term the Fiscal Agent of the Government. According to the Supreme Court's decision — in the case of the First Bank of the Ignited States against Deveaux — THE EVOLUTIOX OF MOXEY. 121 though a corporation was not a citizen, and, therefore, had no right to the jurisdiction of the United States Courts, yet if the stocliholders were citizens of a different State from the defendant, they had the right to use the name of the corporation, in an action instituted in the federal Court. According to the decision in the "Dartmouth College" case, the grant of a charter bv a State — even if it inad- vertently granted the right to exercise one of its sovereign powers^was a civil contract, over which it could exercise neither regulation nor control so long as the corporation exercised its rights, as the Supreme Court construed the charter. According to the decision in the case of McCul lough against the State of Maryland, Congress had the joint right with the States to exercise the sovereign power to grant charters of incorporations; the exclusive right to authorize the bank to ''emit bills of credit ;'' and the Court had the right to regulate the State's exercise of its sover- eign power over its corporations. The States have, therefore, been changed from sover- eignties that had the Constitutional right to exclusively exercise certain sovereign powers, to a nondescript form of government only having such right^s and powers as the Supreme Court might designate. But to maintain the theory that they are sovereignties that have the Constitutional right to exclusively exercise some sovereign i>owers, the Supreme Court has differenti- ated their powers, and decided that they are only sover- eignties in the exercise of what it may decide are their police powers. To this com])lexion have the sovereign States been re- duced by the decrees of a Court originated as the final arbiter in all conflicts between Congress and the States over the right to exercise the sovereign ])owers of the people, as they were distributed and set forth by the com- pact of the States, known as the Constitution of the United States. CHAPTEE X. HORE who had grown wealthy from the exclusive enjoyment of the benefits received from the exer- cise of the sovereign powers to issue money, and to lay a tax on imports, began to use their surplus accumu- lations to purchase the corporations which were exercis- ing State sovereign powers under their charter rights. These charter rights are called franchises, and are granted by the legislatures. Some of the more recent, or more intelligent, States endeavored to protect their cities by giving them the exclu- sive right to make the grant when the exercise of the charter rights was confined to limits of the cities. The city's grant of the charter is then a franchise. Some pro- tect their cities by leaving the right to grant the franchise with the legislature, but if the franchise was to be exer- cised in a city, it was given the right to grant or withhold permission. The permission is called a license. Some gave their cities no protection. The grant of the charters could be for a period of years, or indefinite. The franchise when granted by the legislature — if indefinite — is for the life of the corpora- tion; the franchise, or the license, when granted by the city — if indefinite — is for the life of the city's charter. The corporations, in their operations, were at first local, and confined, in the exercise of their charter rights, to the State that granted the charter; and, if they oper- ated in two or more States, they were compelled to oper- ate under two or more charters, or under one charter and such permission as they could obtain from the other States. THE EVOLVTIOX OF MCiNEY. 123 As the surplus accumulations were" used to buy control of the corporations that were exercising' State sovereign powers, they were operated continuously and connectedly through two and more States. After having thus gradu- ally- consolidated their corporate properties — or their right to exercise State sovereign powers — the managers began to devise ways and means to operate them as units. This caused a conflict over the right to exercise State sovereign powers, with the States on one .side, and corpo- rations, exercising the State sovereign powers acquired by their charters — on the other. The Supreme Court usurped the power of final arbiter in all such conflicts, notwithstanding the Constitution intended that it should only decide conflicts over the exercise of sovereign power between the Staters and Con- gress — for there was no thought in the mind of any of the authors of that instrument that corporations would be made quasi-state sovereignties. If the Supreme Court could so abuse its high constitu- tional trust as to ignore the sovereign poAvers of the States until it recognized none of said powers as sover- eign, except what it was pleased to call the police power, what showing would the States have before that Court in a conflict involving their right to regulate the exercise of charter privileges, even if the exercise was one of the sovereign powers of the State? The sovereign powers of the States — ignored and treated as of no value by the Fed- eral Courts — were, so soon as they were made civil con- tracts by grant of charter rights, transmuted into fran- chises that the Court decided were vested property rights. Inasmuch as a franchise is only that sovereign power of the State which gives a corporation the right to im- pose a toll, or exact a tax, for services rendered, is it not strange that, in the ojnnion of the Supreme Court, the power is a mere worthless right until it is secured by a corporation, when it becomes, as a franchise, more 124 '^^^ EYOLUTIOX OF MOXEY. sacred, as propcrtij, than the products that are the result of the labor of the people? The carelessness, inexperience, and ignorance of State legislatures — in granting the sovereign powers of the States — gave the cori»oratious power to exact such toll for the services rendered, that they were enabled to pay such large dividends upon the money expended in con- struction, it had to be concealed. Concealment was effected by issuing bonds in sufficient amount to pay for coU'Struction, and then issuing stock to the manipulators, who, as owners of the stock, managed and operated the corporations. The only investment that the manipulators, and mana- gers, had in the property was the right to unduly exercise the sovereign power of the State to exact a toll for the services the corporation might render the people. To the extent that they could enforce the right to exact toll, over the amount that was necessary to pay the inter- est on the bonds and the operating expenses, the stock was valuable; for if they could exact sufficient toll to pay interest on the bonds and the operating expenses, and then pay a dividend on the stock equal to the rate of interest they were paying on the bonds, the stock, issued on the abuse of the right, was as valuable as the bonds issued on labor. When the States discovered that the corporations were imposing on the rights of the people by exacting a toll sufficient to pay dividends on stock issued on privilege, /. e.. sovereign power, as well as interest on bonds issued to pay for construction, they attempted to regulate the charge of toll. This was an exercise of sovereign power that was de- manded of the States; one which it was intended they should exercise; and one which the Supreme Court was organized, as a constitutional guarantee, that they should exclusively exercise. But when the corporations appealed to the Supreme THE EVOLUTIOy OF MOyEY. 125 Court, aud claimed that the exercise of the power bv the States Avas a viohitiou of their contractual charter rights, the Court was embarrassed, for the proof showed, in many cases, that the corporations were exacting more than a just and legitimate return on the iiioncij expended. The Court relieved itself of this embarrassment by seriously deciding that the franchise, /. c, the sovereign power which had been obtained from the legislature to exact a toll — however oppressive, however unjust, and however iniquitous in its procurement or in its etfect upon the people — was ''a vested property right ;" and that the incorporators had as legal a right to collect toll to pay dividends on stock and interest on bonds issued on the franchise, as it had to pay dividends on stock and interest on bonds that had been sold for money to pay for the labor that constructed the corporate properties. This decision changed the body and spirit of the law, as well as all ideas of financial and political morals; for if franchises were property, then the easiest way to accumulate wealth was to secure the franchises which exercised the sovereign powers of the States. The beneficiaries of the exercise of the sovereign power to issue money, and to lay a tax on imports, were in the commanding position to secure the franchises, and, thereby secure the enlarged possibilities for accumulating wealth that this decision gave. The legal fraternity took on enlarged importance, and those who best knew how to devise methods to filch from ignorant, careless, or corrupt legislatures charters which gave the exercise of the sovereign powers of their States to corporations, and who best knew how to persuade the courts that the action of the legislatures was what had been contemplated by the framers of the Constitution, became the great lawyers. Many were slow to accept the new order of thingiS, but the inducements were so large that old ideas of practice were fast disa])pearing, when the entry of corporate influence into the ])olitical arena. 126 '^^^'^ EVOLUTIOX OF MOXEY. with its rewards of judicial office and political preferment, caused the patriotism of some to become subservient to loyalty of servitude to corporations. By the assistance and under the protection of such members of the fraternity, the sovereign powers of the States have been so concentrated in corporations that they have become Frankensteins, which overrun and defy the States; exact kingly tribute from the people for all services rendered; determine who shall be the elective officers; name the appointive officers; have abler and stronger representation in the Senate than do the States; dominates CougrestS through caucus and a set of rules, until it has been turned over to a Speaker, and a com- mittee of three, w ho are under their control ; helps Presi- dents write their messages; puts their ablest lawyers in the cabinet to advise how their interests should be pro- tected; and were exjiloiting the country until it became so oppressive and flagrant that the people revolted and goaded their officials into a show of corrective resistance. This was not brought about until the insolence of the corrupt poAver of the Frankensteins had defied Con- gress and jeered at the fulminations of the President. The unwholesome conditions were, in great part, occa- sioned by unwise decisions of the Supreme Court. When it was realized that the States had been deprived of all power to protect their people from corporate impositions, and that the impositions had become so flagrant some- thing had to be done. Congress was induced to exercise its sovereign power for their relief. For years the corporations respected this exercise of sovereign power, until it must have been intimated to them that the Supreme Court would grant relief to its cpiasi-state sovereign corporatioms, if they would petition for relief. The petition presented as an issue the conflict between Congress and the State corporations over the right to exercise the reserved sovereign powers of the THE EVOLUTIOX OF MO^EY. 127 States — a right hsiu-jxmI bv Congress, and errouoonsly given to corporations h\ the Snpreme Court. The Supreme Court was more respectful in deciding against Congress in favor of corporations than it Avas when it took the power from the States and gave it to corporations; for though the decision stated that the exercise of the power by Congress was not mandatory, and, therefore, could not be enforced, it Avas understood to be a warning that it would be wise for them to cease some of their aggresisions. The corporations paid no at- tention to the Avarning, for when they realized that they were not bound by Congress' exercise of the States" re- served sovereign powers, they committed all the excesses ingenuity and aA'arice could devise. Financial and legal morals were changed — practices which had always been considered penitentiary offences became mere irregularities; violations of the law in corpo- rate practices could not be personal ; crime committed by an individual — as an officer of a corjtoration to ad- vance its interest — did not make him personally liable, and it bias not yet been decided that the corporation can be held liable in a fine; trust funds were given to elect the President, and openly and legally justified on the ground that it was necessary for his faction to be in power to preserve the funds; the Democratic party was taken in charge; its candidate selected and used to intim- idate tlie Kepublican candidate; for while the Repub- lican candidate was given large contributions, the Demo- cratic candidate Avas informed of it, and induced to make the charge of corruption, Avhich could and Avould have been sustained if it had not operated to force a com- pliance on the i>art of the Ivepublican candidate to at least the harmony of a working basis Avith the practices of the Money Power. There was reason for all this duplicity Avith the candi- dates of the two parties. While Congress had not openly resented the decision 128 2'i7L' EVOLUTIOy OF MOXEY. that its exercise of the States' reserved sovereign powers over corporations was only suggestive, it had seen proper to pass an act which imposed penal punishment upon the officers of corporations for violations of its provisions. This was an exercise of sovereign power under the inter-state commerce clause; and it was hoped that all violators of the provisions of the act would be punished, notwithstanding the law Avas intended to affect — not the action of i>VAte legislatures — as contemplated by the Con- stitution — but the conduct of corporations. The commission — which Congress had created — had been active for years; had ascertained manj- facts; and was continually calling on Congress for more power to regulate corporate action. It had endeavored to regulate the tolls exacted for services rendered, until they were a just and reasonable return on the money invested. The orders of the commission were obeyed, until a case was carried to the Supreme Court which involved the following facts: A just and reasonable rate had been established, and for a time accepted by the corporations. But when the managers of the corporations realized the possibilities of making money that they were losing — since franchises were property on which bonds and stocks could be legally issued — they issued additional bonds and stock. This is vulgarly known as watering the issues. After this additional or watered issue of bonds and stock was made, the rate which had been established and accepted as reasonable, would not bring in enough toll to pay the operating expenses, and the interest and divi- dends on both the original and watered bonds and stock. The claim was then seriously made by the corporations that the rate which, when established and accepted, was reasonable, had now become confiscatory, and a viola- tion of their constitutional rights. This was an exaggerated phase of the conflict over the right to exercise the reserved sovereign powers of the THE ETOLUTIOX OF 2I0XEY. 129 States, but between Congress and quasi-sovereign State corporations — not between Congress and the States — for what is the watered issues of bonds and stocks but the capitalization of the right to exercise cliarter-acquired State sovereign powers? The Supreme Court decided in favor of corporations, and now, whenever the commission succeeds in estab- lishing a rate that is reasonable on the outstanding cap- italization of the right to exercise a State\s sovereign power and the money expended in construction, the cor- porations just revalue their right to exercise State sover- eign powers, and issue additional bonds and stocks. The Supreme Court shows all the respect for the exer- cise of State sovereign powers, when they are exercised by corporations, that the most zealous of the State's Eight advocates could ask — for it holds that corporations have the right to exact tolls until their receipts are sufficient to pay interest and dividends on the additional, or watered, stock and bonds. When it was realized that the Supreme Court had forced upon the acceptance of the States-, and even upon the accei>tance of Congress, its new doctrine, viz : that corporations had the right to capitalize their charter- acquired State sovereign powers to their full valuation (and the value of the exercise of the sovereign powers of the States is illimitable), a new era was introduced, and will long be remembered. A wild, mad, criminal rush was made to secure control of the more important corpo- rations. Banks were the dominant instruments, and one may recall the struggle to secure and combine the banks. The corporations which owed their prosperity to their exclu- sive right to the benefits that accrue from the exercise of the sovereign powers of Congress to lay a tax on imports, were valuable, and were taken into the combinations; and as they combined, gained strength to secure the cor- ])orations exeicising State ^sovereign powers. This con- 9 130 ^^^^ EVOLVTIOy OF MOSEY. ceutration has i)rogTessed uutil less than a dozen groups are now to be considered. The struggle from now on will be between these groups. The disposition of Congress to enforce its sovereign power was still manifest, and so reckless had become the conduct of the financiers in the manipulation of corpora- tions the criminal statutes looked dangerous. Their only protection from the enforcement of the criminal statutes, until they could be repealed or made ineffective, was the inaction of the officials. The Supreme Court could be relied on until Congress awakened to a realization of its absurd, if not criminal, subserviency to the court, but if it should ever awaken, it might take such action as would induce the courts to fill the penitentiaries with millionaires and managers of corporations. It was, therefore, necessary for the groups to secure more representatives in both the Senate and the House who would sustain the Supreme Court. Sustaining the Court is adroitly accomplished by the patriotic insistence that it has the right and power to finally pass upon the constitutionality of any of the sover- eign pOAvers that Congress may exercise. The patriotism of the President, of the members of Congress, of the officiaks of the government, of the State officials, and of the people may only be shown by un- bounded respect for and blind obedience to the decrees of that Court, even when, in effect, they operate to veto the exercise by Congress of the sovereign power of all the people — though the exercise may be essentially neces- sary to protect the i^eople from the corporations. This so-called patriotism demands that Congress shall accord to the Supreme Court this respect, though it vir- tually gives the court the right to put a veto on its exer- cise of sovereign })Ower — a right which the frnmers of the Constitution denied to the court, though it was only to THE EVOLUTIOX OF MOXEY. 131 be exercised in conjunction with and as legal adviser to the President. There is not, nor can there be, under our Constitution, but one veto on the exercise of the sovereign powers by Congress, and that is the veto of the President, which can be set aside by a two-thirds vote of that body; and it is unpatriotic for Congress to submit to the decisions of the Supreme Court, when they ojierate to veto their action, even it was for the good of the people; but it becomes treason when it is submitted to, as patrioti.sm, in order that corporations may continue their nefarious plundering. Therefore, while corporate representatives were en- deavoring to quietly repeal, or make ineffective, the crim- inal statutes against corporations, a bill was ostensibly introduced in the 51)th Congress to curb their rapacity; and there was witnessed the great farce of leading states- men in the two parties endeavoring to show — not from the Constitution as it was written, and the science of government as it has been formulated from the experi- ence of centuries — but from the decrees of the Supreme Court construing the Constitution — whether it had ever been inadvertently admitted tliat Congress had — not the sovereign i»ower — but the right to pass a Eate Regula- tion law? T'nless such an admission could be found, it Avas contended it was not worth while to pass a law only to have it set aside on the ground that Congres^s did not have intelligence enough to correctly express its constitu- tional rights — /. r., exercise the sovereign powers of the people. The able attorneys of the corporations — in anticipation of this i)lay — endeavored to teach the people through the newsi)apers, magazines, and other methods that the cor- porations were under the exclusive control of the States — and that neither the Constitution nor the decrees of the Su])reme Court gave Congress any control over them ; 132 '^'^^^ EVOLUTIOX OF MOXEY. and they called upon the States to resent sncli an intru- sion of their sacred reserved rights. Some of the goTernors, in ignorance that the Supreme Court decrees had transferred the exercise of their State's ►sovereign powers to the corporations, responded to the call of the attoruevs in a too matter-of-fact way; and with their commissions and legislatures began to regu- late the rates of the railroads, until they were stopped by injunctions of the Federal Courts. These injunctions tended to make the contemplated farce a reality, for there was such imperative necessity for the exercise of sover- eign power, that enough republicans broke through party lines to pass a law for the proper regulation of rates, had not the President — who was attitudinizing as being in favor of the exercise of the power — been seemingly buncoed into giving his support to a bill which was ac- ceptable to the corporations, because it was ineffective in practice. The possibilities involved in the decision of the Su- lireme Court, viz : that corporations might capitalize their right to exercise the sovereign powers of the States, was not generally realized at first. Many who had control of corporations thought their capitalization was large enough : did not understand how they could be bought, joined with others as highly capitalized, and bonds and stocks issued on the combined properties, as a new corporation, in double their com- bined capitalization. But they saw it was being done, and by the most honorable, and most responsible of the great financiers and corporation magnates. They saw fortunes doubled by the simple process of coml)ining corporate properties, and then enlarging the cajiitalization of the right to exercise State sovereign powers. They saw this was being done in mich a manner, under the advice of astute and able lawyers, that it was not a violation of criminal law for the manipulators to appropriate the value of the additional, or watered, cajti- THE EVOLVTIOX OF iWXEY. 133 talizatioii — and that the stoekholdei-s had uo rights iu this additional value, though it was a debt upon their property. They saw that it was regarded as honorable to use the funds of their banks, and of the insurance companies, to give a market value to the watered bonds and stock until they could be disposed of, Avhen the corporations were abancioned, and left to the managers who could not make the receipts sustain the fictitious values. They saw that it was considered honorable to pur- chase a controlling interest at the reduced price, and by a few improvements, extensions, and the purchase of ad- ditional properties issue additional stock on enlarged capitalization of the right to exercise State sovereign power, and unload it on the people. This continued as honorable, legitimate, high finance — - recognized and approved by the party in power — until the idea of electing to the Presidency a man who entertained views of W, J. Bryan was treason to the country; and any use made of any funds — whether trust funds or not — to defeat his election would be lawful, because it was patriotic, honest and necessary. This generated the promoter in high finance. If the line between thievery and honesty had been rubbed out, in the permission given to enjoy the profits that can be made to accrue from the ^?upreme Court's construction that the grant of a charter included a license to capitalize the exercise of State sovereign powers, theii there was no deterrent reason why the jtromoter should not enter the game. All he needed was a State charter, carrying the right to exercise some of the State's sover- eign powers (which the States gave to any one who would I)ay the fees), and the address to make the people believe they were getting in on the "ground fioor," when they paid the price asked for the bonds and stock. The frauds practiced upon the peo])le by these methods were consideral)le for years, but they had limitations, and were confined to the over-credulous and speculative. 134 ^'^^ EVOLLTIOS OF MOSEY. But after the i»romoter lealizeu how profitably the leading bankers and high financiers were working the people, with the deposits of the banlcs, the funds of the trust and insurance comi»anies, and bv contributions to the party in power, he took on additional courage and secured a chain of banks, trtist companies, and insur- ance conijjanies also. It was now — after all fear of crim- inal responsibility was thought to have been removed — a race between the promoter who was a born thief, and the high financiers, who were easily developing into thieves, for the money of the people. The promoters showed such abandon and superior genius in the methods adopted, that the financiers be- came alarmed, and took the necessary steps to destroy their operations. This was easily done, btit dangerous in the execution, because it could not be done without a local panic, and any sort of a panic excites the wildest and most unreasonable fear.s of the people. A panic can be made local, but it is necessary to make elaborate arrangements to confine it to the locality in- tended; for there is danger that it will become general, if not properly handled. Therefore, after making all arrangements necessary to confine the efi'ect of the panic to the locality intended, the high financiers — to the utter demolition of the promoters — called into play their right to apply intrin,sic-value law to the abusive "use-value"' practices of the promoters. This action of the financiers, who had command of most of the gold, destroyed the schemes of the promoters ; and in the adjustment of all obligations in gold coins during about thirty days, the promoters were forced to transfer their properties to the high financiers at their own price. The poor old government, in the ignorance of its offi- cials, was made to suffer in its treasury, and in the humil- iation of its President, when he stood helpless in the presence of the representatives of the Money Power, and THE EVOLUTIOX OF MOyEY. 135 was bluffed into purchasing the immunity of the people from the threatened panic on the terms imposed. The promoters, in addition to infringing upon other helds of high finance that the groups had preempted, had infringed on the highly lucrative field of the tariff-pro- tected steel industry, by securing the only property that could be made to profitably compete with its United States steel corporation, Avhen they secured the controlling- amount of stock in the Tennessee Coal and Iron Company. Congress — in its desire to preserve the benefits of com- petition — had exercised its sovereign power to make it un- lawful to combine two competitive corporation,s ; and, since the high financiers had paid no attention to the law, the President had been trying to induce the Supreme Court to decide that the act was legal, so that he could separate into their different units those that had been combined — and it was now considered dangerous to effect such combinations. It was worth while to create a local panic to secure the Tennessee Coal and Iron Company properties for the United States Steel corporation, and, thereby, secure a monopoly of that industry, but even if the panic was not created for that purpose, it could be utilized to that end. So it was made to appear as if the pauic Avas about to get beyond control, and become general ; and after most of the government's money had been loaned to the banks, the President was informed by representatives of the Money Power that he must devise some way to keep the i)anic from becoming general, for everything that was legal had been done by them; and that the only thing they could do that would be effective was illegal, for it involved the absorption of the Tennessee Coal and Iron Company by the United States Steel Company purchas- ing the stock of that company from the ])romoters. In addition to knowing that the combination was illegal, both the President and the representatives of the Money Power knew that he could not keep them from making the panic 136 '^'^^ EVOLUTIUX OF MOXEY. general, though they had no idea of doing such a thing, or allowing it to be done. The statement was made in the expectation of humil- iating the President into giving his permission to con- solidate the two corporations ; and when he consented, the fear that the panic would become general disappeared, and "use-value" practices began to resume their cus- tomary conduct of business. If corporate impositions are to be continued as legal, and sustained by the Supreme Court over the corrective exercise of soA^ereign power by both Congress and the State legislatures, then Socialism is a logical necessity; for if concentration of all wealth and power in the hands of the financiers and corporation magnates may only be stopped by the adoption of the principles of Socialism, then their adoption is a dominant necessity. CHAPTEE XI. EESIDEXT EOOSEVELT should be excused many of his statements in reference to the duty of the States and of Congress in regulating and controlling corpoiatious, for he should not be exi^ected to know better than the members of Congress, and the mem- bers of the legislatures, how the sovereign powers were dis- tributed, and how Congress and the legislatures have been deprived of the right to exercise their respective sovereign powers. When he sees, however, that the States are compelled, and Congress willingly exercises sovereign powers in sub- serviency to the rights of corporations, he does not under- stand it. He has been advised that the States reserved the power to regulate their corporations, and that Congress may not exercise this reserved power, but he ha.s not been ad- vised that the States have been deprived of this power by the Supreme Court; and, therefore, he has called upon them to take the necessary action. He has had an intimation of what restrains the States, in the injunctive processes of the Federal Courts, and there is reason to believe — while, he did not refuse to sustain the orders of the inferior courts — that he had the intimation conveyed to some of the more complaisant judges that he might feel called upon to take some action. While the country is awaiting the decision in the in- junction cases, the President has responded to the Ameri- canism of his nature, and called a convention of the Governors to formulate some plan of action by which the supremacy of the sovereign powers of the States could be asserted, as the Constitution intended. The final result of their deliberations must be the conclusion that the 138 ^'^^^ EVOLUTIOX OF .MOXEY. Supi-eiue Court iiifriuged upon the powers of the States, Avhen it decided that the exercise of the sovereign power to grant a charter of incorporation was thereby changed into a civil contract that the States might not impair. When the President, backed up by the Governors, realizes this, he should say of the action of the Court, as Jackson once said : "Marshall has rendered his decree, now let him enforce it.'' The President is bold to act when he can determine who is the enemy, and he even strikes — blindly — as he did after he was taken advantage of l)y the hypocrisy of the Money Power and intimidated into giving his assent to the unlawful consolidation of the Tennessee Coal and Iron Company with the Steel Trust to avert a panic, when it was not intended to be general ; and after he was offended by the insolence of Harriman, who is defiantly capitalizing the exercise of State sovereign powers to purchase the control of transportation corporations, until he is a menace to commerce. He attributed the power that was being so hypocriti- cally and so insolently exercised to command over gold; and, rightly regarding gold and not men as the cause of the evils, and as the deadliest foe to the government, to the people, to morals, and to religion, he blindly struck it a bloAv, when he ordered the sacred inscription to be taken from the gold coins. If it is not his purpose to encourage and assist the States to ascertain why they may not control their cor- porations, and when the cause is ascertained, remove it, then the call for the convention of the Governors was idle, if not dangerous. The movement will prove danger- ous, even if the convention and the President should realize that the exercise of State sovereign power.s to con- trol their corporations has been made ineffective by the Supreme Court, for it would now be impossible for the States to exercise intelligent control over many of them if the restraint was removed. THE EVOLLTIOX OF .VOyEY. 139 The ^Niipreine Court deeisious have created conditions which may not be ignored, and certainly cannot be en- tirely changed; for the intelligent interests of the people will demand that corporations— which now operate, as units, through two or more States — must be under the control of one sovereignty — not under the control of two or more sovereignties. The only sovereign power which could now^ efliciently control corporations that operate in two or more States is that of the United States; and when this is realized, the convention of the Governors and the President could very properly advise that the States confer on Congress, not only the exclusive exercise of the power to grant charters to all such corporations, but the exclusive exer- cise of the right to control and regulate them. This, however, should be done only on the express condition that the States resume exclusive power over the control and regulation of their corjiorations. Such an arrangement would prove a happy and proper distribution of the exercise of sovereign powers, pro- vided the corporations chartered by the States had no rights, as citizens; and provided the legislatures and Con- gress might regulate and control their respective corpora- tions, free from interference by the Supreme Court, except as it was constitutionally appealed to, to determine in any conflict between Congreiss and the States, as to which had the right to the exclusive exercise of certain sovereign powers. If the exercise of the sovereign powers of the States over corporations was redistributed, as above suggested, and Congress should charter, regulate, and control all corporations that operated in two or more States — with due regard for the rights of the ])eo})le of all the States — the treatment of the peo])le would depend upon the integ- rity, capacity, and wisdom of those chosen to exercise the sovereign powers of the United States. If the exercise of the sovereign powers of the States 140 ^'^^^ EVOLITIOX OF MOXEY. over foi'poratious should be redistributed, as above sug- gested, and the States should charter, regulate, and con- trol their corporations, free from the interference of the Federal Courts, the treatment of the people would depend upon the honesty, capacity, and wisdom of those chosen — not by the corporations, but by the fjeople — to exercise their sovereign powers. That is all the protection that the people of the States and of the United States are entitled to, and it is all that can be given, for more cannot be secured. It would give far more protection than they have ever received, or will receive, from judicial officers — appointed by the rulers of faction — who arrogate to themselves the abnormal and almost inconceivable power of changing sovereign powers to civil contracts, in order that corpo- rate interests may be protected from the regulation and control of both the State Legislatures and Congress. The sovereignty of the States — not the quasi-sover- eignty of State corporations — would then be represented in the Senate; and its members — appreciating that they were rejjresenting sovereignties which were exercising absolute control over their corporations — would be en- couraged to exercise absolute and wise control over cor- porations chartered by Congress, when they realized that they were exercising the sovereign powers of the T^nited States, free from the interference of the Supreme Court. Freedom from intellectual bondage to that Court would command the services of the greatest intellects of the country ; for where could talent of the highest order find such a field for its activity as in the exercise of sovereign powers for eighty million and more people? Once intellectually and patriotically free from corpo- rate influence, and Supreme Court vetoes, the members of Congress would rise to the dignity of a proper, ele- vated, wise, and patriotic exercise of all the sovereign powers of the United States. The exercise of the soA'ereign power to lay a tax on THE EVOLUTION OF AIOXEY. 141 imports wonld be revised, and instead of being laid as now — in fear of corporate hostility and in hope of cam- paijin contribntions — it would be so imposed as to de- velop the strength of the government; making it inde- pendent in its resources in time of war, as well as in times of peace. The exercise of the sovereign power over immigration would be revised, and instead of being, as at present, in favor of shipping corporations and to provide cheap labor for other corporations, it would restrict the tide, until the country could assimilate the undigested mass that is a menace to the government, to morals, to the customs of the people, and to their religion. It is unwise to permit foreigners to be brought here in such numbers that they find it to be to their interest to segregate in colonies — where the process of assimila- tion is not being carried forward. So long as they are permitted to colonize in such numbers that they not only retain their habits, customs, and language, but instruct their children in them, they are not adding to our citizen- ship. Foreigners do not become Americanized except as they learn to speak, read, write, and think in our language; for until they can think in the language, they are at such a disadvantage they have to colonize to protect themselves from the rapacity of those who would take advantage of their lieli)lessness and ignorance. The exercise of the sovereign power to issue money would be radically changed, and, instead of its being ex- ercised in subserviency to the interest of the gold owners and bankers, it would be exercised as a sovereign power should be, exclusively in the interest of all the people- not in the interest of a favored class. When those who are chosen to exercise the sovereign powers of Congress realize that the issue of money is the exercise of the most dominant of the sovereign powers, they will have full appreciation of the teachings of Adam 142 '^IIE EVOLVTIOX OF MOXEY. Sniitli and of the observations of Sir James Stewart and Colweir.s Ways and Means of Payment, on Money of Account and the "words" that compose it. When it is understood that the "words," which com- pose the "Money of Account," though called words of value, or the language of finance, are, in scientific ac- curacy, expressions of labor; and that the "Unit of the Money of Account," or the unit of value — as it is more generally known — is the unit of labor, patriotic intelli- gence will be better prepared to devise a method for the issue of money as the exercise of a sovereign power. If the necessity for expeditious settlement of credits; if the inconvenience in handling gold has compelled it, in practice, to give way to government notes, bank-notes, and the paper credits of the people until, in the higher financial centers, its use is impracticable and a barbarism ; if the only use that is now made of gold coins, viz : to act as standards of value — depends upon the power of tender to make them serviceable when demand is made for the payment of obligations ; and if the excuse, or the necessity, for making the demand arises out of conditions created by corporations unduly cai)italizing their franchises and licenses, is it not time that legal tender be taken from gold, and other changes be made? If gold coins should be considered — as they really are — as mere official .substitutes issued by the government to be used in the place of the pajier credits of the people when the credits have lost their right to "use-value," the issue and use of money could be the easier understood. For if the legal-tender or official substitutes are issued to be used in the place of the credits of the people, they should be of the same, or a value similar and equal to that of the credits. The value of the credits dejjends upon the use that can be made or the service that can be gotten out of them ; and the only use or service that it was ever intended should be made, or gotten out, of them is to liquidate debt. THE EVOLUTIOX OF MOXEY. 143 whicli they do efficiently so long as they have "use-value." Therefore, since the credits of the people are only in- tended to have "use," or service, value, the official sub- stitute should only have "use-value ;"' and gold coin — not- withstanding their claimed intrinsic worth — would be inefficient, unless they had the power of governmental tender to compel their service, /. c, acceptance, as liqui- dators of debt. Tf these things be true, and the only value the official substitutes should have is in their use, /. c, service, as liquidators of the paper credits of the people, then the official substitutes should not be of a value different from the value of these obligations. It has been /shown that these obligations are always issued at the mutually agreed number of labor units that have been, or may be, expended in creating products ; and that their value consists in their use — as solvents of debt — until they are redeemed v\ith other and equal obliga- tions. If value is labor, then value, or lal)or, is exj)ressed by the "words" which convey ideas of the units of labor involved. The "word.s" of value are dollars, dimes, cents and mills, but these "irrjrds'' compose our "Money of Ac- count," i. e., our language of finance; and the tise of the ''words" that express the unit of labor and its multiples and subdivisions, conveys all the ideas of value that intel- ligence can impart or apprehend. Vahie, therefore, must be the conclusion of that exer- cise of judgment which determines the usefulness, or worth, of the object or objects under consideration. This usefulness, or worth, is best determined by a coii- sideration of the n,umi)er. efficiency, and intelligence of the units of labor, as this is made manifest in the utility of the product; and this conclusion may only be con- veyed to intelligence by the ''words" of the Money of Ac- count, used to express the mutually agreed value of the product. The mutual agreement as to the number of labor units 144 ^'■^£' EVOLUTION OF MOXEY. iuvolvod in a treat}' of exchange is a contract — a record of wliicli is the paper obligation issned, stating the agreed nnmber of the units, /. e., the value, as it is termed, of the product; and the obligation is only valuable in the use, /. e., service, which can be made of it as a liquidator of debt. The legal tender, or offlcial substitutes, therefore, should only be mere representatives of the "words" of the Money of Account, certain and stable in their service or "use- value"- — which certainty and stability' may only be secured hy the poicer of tender. The only support that the paper obligations of the peo- ple have to maintain their "use-value" is the confidence That when they are finally presented to the ones wlio issued them, that they will be received in liquidation of debt, or will be paid with ofticial substitutes which will liquidate an amount of debt equal to their face value. The obligations of the people do not need legal-tender to compel their use, for they are acceptable so long as they are issued on actually expended units of labor; and in good conscience are entitled to use — as liquidators of debt — so long ais honesty controls in their issue and use; but in law and equity they must be paid in gold coin, irJienever avarice makes the demand, whether they have lost their right to "use-value," or whether they have not. The commercial experience of this country has demon- strated that the honesty of the issue and use of the credits of the peoi>le has been ;such, that they conduct 97 per cent and more of the volume of business, and would conduct it safely were it not for the issue of cor- porate credits on franchises, in addition to those issued on labor. It is so evident it is noAv generally admitted that official substitutes are not needed, nor used, except in the retail trade (where the credits of the people may not be used), and in the settlement of the balances in the wholesale business, and that their use in the two does not conduct 3 per cent of the volume. THE EVOLUTION OF MONEY. 145 Valuable as gold is thought to be intrinsically, it can- not be made to serve this small use on its inherent worth, but has to be given the power of "tender;" and by virtue of this gift, avarice and lust for power periodically de- mand that all the credits of the people shall be paid in gold, /. €., legal tenders. There is neither economic neces- sity nor scientific reason for giving gold the exclusive right to the legal-tender jiower; and when it is seen how the gift is abused by the periodic criminal demand that all the obligations of the people be paid in gold, thereby creating panics, it should be deprived of the right. If the legal-tender power should be taken from gold, its value would depend on its commodity demands. The value of its use, as official substitutes, however, depends solely upon that power which makes it a solvent of debt, or the standards of payment, viz : the Legal Tender power. The i)rofits made out of the use of gold are due both to the power of tender, and to that manipulation of the use and power which enables the owners of gold and corpo- rate properties to prosper at the expense of the people. The Government, therefore, instead of giving the power of Tender to the owners of gold to be manipulated — as is done — should sell it to Avhoever desires to purchase official substitutes; and since government notes — made full tenders in the payment of private and pul>lic debt — ■ have al] the "use-value" that is needed, or that gold coin could have, they should be given the exclusive right to the legal-tender sovereign power, and sold to the people in such quantities as they might find it profitable to pay the labor or ''use-value'' assigned the legal-tender notes. The proceeds from the ^sale of the notes would thus enure to the benefit of all the people, and the value of the service that Tender secures would cease to be used to make those, who are now the exclusive beneficiaries of the exercise of that sovereign power, the prospective bil- lionaires of the present intrinsic-value system. 10 CHAPTER XII. F a change is not made in the issue of money that will cause the legal rights of the gold owners and of the creditors to conform to the "use- value" practices of the people, but "use-value'' prac- tices are to continue at the mercy of intrinsic-value de- mands, then nothing can be done for the protection of the people until the warfare for supremacy between the groups has been fought to a terminaiton. The "use-value" of the obligations of the people — as well as the "'use-value" of the notes of the government, the notes of the banks, and of silver — depends on the amount of gold that is retained in the country, and tlir use that is made of it. The fact that a general demand for payment in legal- tender gold coin can be made, and the certainty that it will be — if gold becomes scarce — makes the conduct of business as uncertain as the manufacture of powder, for the value of everything depends upon the quantity and movement of gold. It can be made scarce by the failure of the mines to produce; by the failure of crops, when the balance of trade turns against this country ; by war, when other nations need it to preserve their existence, and bid more for it than business can afford to pay. It can be made comparatively, and, therefore, dangerously scarce by the ever-increasing issue of bonds and stock on fran- chises and licenses, and disastrously scarce by one of the groups buying it up and withdrawing it from circulation, until they have created a panic. As long as the intrinsic-value system gives all of the legal-tender sovereign power to the owners of gold, the "use-value''' praetiees of the people onhj create uealth THE EVOLL'TlOy OF MOyEY. 147 for said oicncrs to appropridtc as thry make demand for the payment of all obligations in legal tenders. The people receive no protection from the goverumeut, for it cannot give them any. The only protection they receive is the incidental protection that necessarily ac- crues from the measures the grouiJiS take to pro- mote their interests and protect themselves from each other. This protection grows Aveaker and more uncertain as concentration of corporate proi>erties takes place, and the number of groups lessen. As additional advantage is taken of the permission to combine the capitalization of the right to exercise the sovereign powers of the States with the capitalization of the right to exercise the sovereign powers of Congress to issue money and to impose a tax on imports, there will be such a concentration of sovereign iiowers in corporate rights that in a short time there will be only a few of the Frankensteins struggling for supremacy. When this final contest comes the groups will have all the available gold, and it will be the most effective weapon used in that warfare; and their war chests will hold it as safely as do the war chests of nations in a death struggle. Each group will be strengthening its defense, and this may be easiest done by forays upon the "use- value" practices of the people, which will become more incessant, until the i)anic is precipitated where one group absorbs the others. The one which prevails will have the Government for a co-partner, for the operations and manipulations will have so depleted the people, and so distressed the gov- ernment in its revenues, that it will have been compelled to join with one of the groui)s to finance its expenses. This combination of the government and one of the groups may be brought about in times of peace, but if not, it could be by a war. If brought about in time of peace, it would be by the re|)eal of the ])resent banking law, and the creation of one (ireat Central Bank which would have 148 ^^^ EVOLCTIOy OF MOXEY. the right and power to grant charters to branch banks thronghont the country-. The Government and the group might be eijnal holders of the stoclv of the bank. The directors might be ap- pointed, one-half bv Congress, the other half elected by the private stockholders. The bank would be the treasury of the United States, receive all its deposits, and finance all its operations. It would provide for the issue of all money, but as follows : The Central Bank would issue no notes, except to the branch banks ; receive no deposits, except from the government : and pay no checks except those drawn by the Secretary of the Treasury, as he, for convenience, would cause deposits to be made in the branch banks for immediate and incessant use. It would be strictly a hold- ing company — that is, the branch-l)anks would be required to purchase of the Central Bank such government notes as it might decide the branch-banks ought to issue. The branch-banks would be required to secure the re- turn or payment of these notes, by depositing with the Central Bank a certain percentage of the amount in gold coin, and the balance in bonds and securities designated by the holding, or Central Bank. The percentage of gold coin required, and held in the vaults of the Central Bank, would be sufficient to pre- serve the "use-value" of all the notes issued ; and it would be announced — as does the Bank of England — that the Central Bank would — at any time — redeem any of the notes issued by any of the branch-banks upon presenta- tion. The hundreds of millions of gold coin that the branch- banks would deposit in the vaults of the Central Bank would make the accumulation of gold so great, that the fear of a panic would be minimized ; and, if the intrinsic- value system is to be continued, the Central Bank is neces-' isary to secure the people protection from the recurrence of panics whenever a general demand for payment is made. THE E\OLVTIOX OF l/O-YLT. 149 Under wise, patriotic, aud honest niauagenieut the Central Bank could be made to give the only protection that the people can receive under the intrinsic-value sys- tem — where the right to make the general demand is an ever-present danger. If, from any of the many causes that artificially create an apparent or legal necessity for large quantities of gold, the notes of the government should be presented to the bank for redemption, until the withdrawals should jeopardize both the ''use-value'' of the notes, and the ''use-value" of the credits of the people, the bank could protect the people from a panic by what is known as the "Defensive Premium," which puts a check upon the criminal enforcement of their legal right by the Money Power. The ''Defensive Premium" is internationally recognized as legitimate, though it is an increasing partial repudia- tion of the contract intended to cease the withdrawals of gold from the bank. It means that the government having erroneously given the exclusive exercise of the sov- ereign power of Tender to the owners of gold, and, thereby, placed itself and the people at the mercy of their abusive and criminal enforcement of their right, en- deavors to protect itself and the peoj^le, while it preserves the right to the gold owners. When the bank issues and sells its notes, as money, it does so under the express agreement that it will re- deem the notes in an amount of gold equal to the sum called for by the notes whenever they are presented for redemption, or payment, but it does not intend to do so. The agreement was not made to be performed, but in the calculation that it would secure full and stable "use- value" for the notes, notwithstanding they were not given the power of Tender to sup]»ort their "use-value;" and in the hoi)e that it would maintain their "use-value" on an equality with the ''use-value'* of gold coin, which is sui)i)orted by the jiower of Tender. 150 '^'^^^ EVOLLTIOX OF MOyEY. This govei-umeutal reeognitiou of the right of the own- ers of gold to the legal-teuder sovereign power — which supports the "use-value"' of their metal — is the intrinsic- value system; and, so long as the government respects and enforces that power in their exclusive interest, some action is necessary to protect the "use-value" of its notes, and the ''use-value" of the paper credits of the i^eople, from the criminal enforcement of their intrinsic-value legal rights by the gold owners. p]xperience — it is claimed — has demonstrated that the highest financial wisdom is — not to give the legal-tender quality to the notes of government — but to gold coin ; and then for the government to endeavor to protect itself and the people from the avaricious abuse of the exercise of the power, by the organization of a Government bank. The Bank would be organized to purchase, or make a market for, all the gold that might be mined. It would be an unprofitable holder of gold when it could not be profitably employed by its owners. The gold would be withdrawn by the Money Power whenever they could make a profitable use of it, until the "use-value" of both the credits and of the notes would be destroyed, and a panic precipitated, if the "Defensive Premium" was not used to cease the withdrawals. The highest protection that the people can receive under the intrinsic-value sys- tem is from a Government bank, and this protection may only be secured by the "Defensive Premium." Therefore, if criminal raids upon the gold of the bank, or withdrawals to prosecute wars, should threaten to jeopardize the "use-value" of the notes, and, consequently, the "use-value" of the credits of the people until a panic was imminent, governments have deemed it patriotic, moral, and honest to violate the agreement and demand a premium for the gold, which is increased from day to day as the notes are presented, until the loss forces the acceptance of the realization that the "use" of the notes is as serviceable as the use of the gold coin, notwith- THE EVOLUTIoy OF ilOXEY. 151 standing they are in law dejjendent on gold coin, and not on the power of Tender, for their use-value. Though a central banking system, in the hands of honest and patriotic men, could be made more protective than any other of the intrinsic-value systems, it is more dangerous in the hands of evil and avaricious men than all other systems. For it can be so easily managed to acquire the wealth and the power of both the people and the government, that the temptations have never been successfully resisted; and the adoption of such a system is the last step in the centralization of wealth and power that precedes the establishment of an aristocracy, the establishment of a plutocracy, or revolution. The bank has been a necessity for years; has been ad- vocated by some theorists, and endeavored to be secured by some practical financiers. It would have been inau- gurated but for the contlicting interests of the groups. While each of the groups desire it, all are ready to jom in the destruction of the group that lays plans to secure it. The Morgan group, in the confidence and iuisolence of what it deemed its power, made the attempt a few years ago. The history of that attempt is interesting, and has been instructive to the other groups; and they are pro- ceeding with more wariness, and much less confidence. The press rejjorted that ^Ir. Morgan, as a promoting financier, having won the confidence of Wall street until he could command every dollar in it, had consolidated a number of New York City banks. This Mr. Morgan denied. The press then reported that he had gone to Europe, and was socially busy in the leading financial centers and with the crowned heads — as the writer believes — in his efforts to make an alliance — ott'ensive and defensive — with the Money Power of P>urope, which would compel this government to place him in charge of the bank, if Con- gress should grant the charter. A committee of nine members had been appointed by 152 ^^^ EVOLVTlOy OF iJOXEY. the Fifty-sixth Congress to prepare a financial bill for the Fifty-seventh Congress; and shortly after Mr. Morgan's return it Avas reported that the committee, after consulta- tion with him, had appointed a sub-committee of three to prepare the bill. A short time thereafter, through an error, or as a feeler, an ex-Hecretary of the Treasury, Mr. Eckles, set forth, in a magazine, that the sub-committee had prepared a bill for a Central Bank, and he discussed the merits of the bill and the bank. This Avas followed by the reported excitement on the street of a rapid advance in the value of the stock of Mr. Morgan's bank from f 500 for a $100- share, to |850, due — as was reported — to the bids of the Standard Oil groujj. Various were the reports of the conduct of the stock- holders — who did not regard the stock as Avorth over $500 — as the bids increased to $850, Avhen it was reported that the stock Avas in Mr. Morgan's possession, and that in accordance with the agreement with which the certifi- cates of stock were placed in his possession, he must either take it at $850, or turn it OA^er to the OAvners to be sold. It Avas reported that Mr. Morgan endeavored to quiet the stockholders into holding the stock, but AA'hen he could not, he refused the stock at $850, and told the OAA-ners there were diA'idends of $1,000 due them on each share of stock they wanted to sell for $850. The eflfort of Standard Oil to purchase the control of his bank was made ridiculous, and Mr. Morgan went serenely forward Avith his contemplated consolidation of corporations that conducted the business of the world. The Standard Oil group realized the danger to their interests, if the Morgan group should secure the passage of the bill, and the management of the bank. They stripped for the fray — for it had to be deadly. Mr. Morgan Avas making the victory easy for Standard Oil, for he, and his group, were busy enlarging their THE EVOLUTION OF MOXEY. I53 credits by the absorption and consolidation of the vast properties they would need, and could profitabh' use. It was reported that the Standard Oil group was sell- ing large holdings. This continued, and as the Standard Oil group sold and depressed the market, the Morgan group bought, until the Standard Oil group — which was accumulating gold and money b}' withdrawing it from circulation — realized that the Morgan group could not meet a demand, and the demand was made. Though the demand was only intended to affect the Morgan group, and defeat the passage of the bill for the Central Bank, the loss on Wall street was fearful ; and in the adjustment, Standard Oil took control of Morgan's chief properties ; Mr. Morgan was exposed and discred- ited ; driven in temporary disgrace to Europe, leaving the adjustment to his son. After Mr. Morgan's temporary re- tirement, the concentration of properties was carried on by the different groups. so recklessly, that exposures have been made which called for governmental action. There has been much agitation on the part of the gov- ernment, and it has been directed, in great part, against Standard Oil. Mr. Morgan again appears as a leader in the financial arena, but more in working harmony with the administration than a.s an enemy of the Standard Oil system. The action of President Koosevelt, in some respects, for a time so disconcerted the conspirators that they have seemingly ceased the open internecine strife, and laid plans to check his activity. His rabid attempts to correct some of the abuses, made it necessary that he should real- ize the extent of their power ; and after they had caused the Departments to refuse him their supjiort, he sum- moned the Governors of the States to his assistance. Congress has just adjourned on the eve of another elec- tion, after showing its hostility to the President, and its favoritism to the Money Power. It passed but little legis- lation that the President wanted. It contemned the ap- 154 THE EVOLUTION OF MONEY. peals of labor. It stood pat, because standing pat means the retention to class interests of everj'thing that it has gained in the past. The only relief legislation that was jtassed was snch as the Money Power secured in the passage of the Currency Act. This Act enables the stronger groups, by the exercise of the permission given their banks to change many of their securities into money, which relieves them of the necessity of asking the aid of other banks, to take the better care of their interests. The utilization of this permission for a few years, as it can and will be manipulated to make money cheap by large issues, and then make it dear by withdrawal from circulation, will give them such command of a rising and falling market, that they can easily acquire all the wealth which the "use-value" practices may create, without caus- ing a general panic; for a general panic may no longer be necessary, if their purpose can be as effectively ac- complished by quiet and steady market manipulations. This is the condition which x^recedes the coming elec- tion, when there is greater diversity of opinions, even in the ranks of faction, than heretofore between parties, due to the fact that conditions call for harmonious, intel- ligent, patriotic action when ignorance, corruption, and the insolence of avaricious lust for power are in the ascendent. INDEX. PAGE Amsterdam, Bank of 24 Aristocracy of land and slaves 8G Banks, war between 72 Banks, dominant instruments 129 Bank of U. S., First, a monopoly G4, 65 Bank, Central, reason for 148 Bank, Central, effort to secure 151, 152 Bank credits, benefit of 28, 29, 30 Barbarian idea of value 17 Benton, Senator, views of on banks 80 Bonds, base for support of notes 90 Calhoun, Senator, views of on banks 81 Charters, how granted 122 Citizen, why "word" ^as chosen 68 Civilization, germ of 13 Civilization, may not be checked 22, 23 Civilization, what advances 25 Cleveland, President, reason for bond issue 109-111 Coin supports bank credits 23 Colonies, issue of money by 53 Constitution, when I'egard for, an evil 85 Constitution, wherein a retrogi-ession 58 Cooper, Peter, Greenback candidate 103 Corporation, not a citizen 120, 121 Corporations operated as a unit 122, 124, 125 Corporations gain strength, how 129 Corporation."* enlarge holdings, how 147 Crawford, Secretary of Treasury, report 80 Credits, value of, depends on use 144 Dark Age, freedom from bondage of 51 Dartmouth College case, reason for decision 73. 120 Defensive premium, what it is, how used 148, 149, 150 Degeneracy caused by intrinsic value 51 Democracy, what is 87 156 INDEX. PAGE Desire made a concretion 18 Devices to effect exclianges, origin of 22 Devices to effect excliauges, bow sliould be s-upplied 37 Fetisb worsbip of metals, effect of 57 Finance, bigb, wbat is 123, 133 First bank of U. S. vs. Deveaux 68 Francbise, wbat is a 123 Georgia, State of. Assessed tbe bank 67 Gold and silver, lose rigbt to be used as money 22, 23, 35 Gold and silver are value, error of 62 Gold, wbat are uses of 100 Gold bas no practical use as money 101, 102 Gold made legal valuator 93 Gold, power attributed to 138 Gold, value of depends on tender 145 Gold, value of indeterminate 34, 35 Gold Reserve legalized 96 Gold coin, mere official representatives 142 Government must issue money 59 Government, demand tbat it make its money good 94 Government, changed to a plutocracy 67 Government and corporation own bank 147 Governors of States, action of 132 Greenbacks, war against by banks 95 Greenback Party makes canvass 103 Hamilton, Secretary of Ti-easury, views of on money 61 Harrison, President, refusal to issue bonds 108 Immigration, regulation of 141 Interstate commerce 114 Interstate commerce clause, reason for 116 Intrinsic value, unit of 63 Intrinsic value system strengthened 57 Intrinsic value, degeneracy caused by 51 Intrinsic value, error of system 99 Intrinsic value, inefficient, why 25 Issue of money, a sovereign power 112 Jackson, President, hostility to bank 77 Jefferson, Thomas, views of on money 63 Juilliard rs. Greenman 97. 102 Kings of Finance, influence of 56 IXDEX. 157 PAGE Kentucky, State of, issues money Hi Labor, source of value 49 Lawyers, enlarged importance 125 Legal tender, supports bank credits 29 Legal tender repudiated 71 Legal tender, power of, when properly applied S7, 88 Legislature, carelessness of grants 124 Lincoln, President 104 Maryland, State of, assessed bank 118 Missouri, State of, issues money To McCullough vs. Maryland 72, 118 Money of account 45, 56, 60 Money, changes in the issue of 21 Money, issue of 99 Money, issue of, how provided for 141 Money, issue of must conform to practices of people 146 Money, the issue, a sovereign power 112 National banks, issue money 88 Paper credits, use of 38 Paper credits, value of depends on gold 146 Panic of 1837, cause of 78. 79 Panic of 1873, cause of 92 Panic can be made local 134 Paper money, representatives of words of value 11 Parties, cause of origin 67 Patriotism suffers vicariously 84- 86 Pensions, why increa.sed 106 People, how protection secured 140 Powers of constitution 53 Power of tender, effect of exercise 56 Plutocracy , 86 Promoters, cause of their activity 134, 135 Republicanism, what is 87 Republican party, origin of 69 Reserved powers of States, give protection 119 Resumption Act of 1875. effect of 89 Roosevelt, President, buncoed 134, 135, 137 Settlement of contracts, when unjust 44 Silver dollar, reason why not equal to gold dollar 93 Silver, why demonetized 93 158 INDEX. PAGE Silver, action of the Congress of 1878 107 Smitli, Adam 11, 49, - go Stewart, Sir James 11, 45 Sovereign power, is it a private right? *56 Sovereign power, ignorance of 113, 114 Sovereign power, who will exercise 75 Sovereign powers, distribution of 55 Sovereign powers, how they should be distributed 139 Sovereignty, conflict over its exercise 117, 118 State banks GG States, reserved powers 112 Stevens, Hon. Thad.. views of on bankers 85 Supreme court, reason for origin 115 Supreme court, failure to realize duty 117-120, 121 Supreme court, usm-ped power 123 Supreme court, made corporations sovereignties 113 Tender, origin of 3G Tender changes value from worth to use 42 Tender, effect of 5G. 59, 84 Tender perfects intrinsic value system G3 Tender, exercise of constitutional 97, 102. 110 Value of paper credits determined 42 Value, Congress may not create 9G Value is labor 143 Value determined by use or service 19 Value, origin of the idea of 27 Value, definition of 41 Venice, Bank of 27 War of 1812, how financed 70 Watering bonds and stocks, authority for 128 Watering bonds and stocks, conflict over 129 War of 1861, result of peculiar civilization SG Words, standards of value 11 Words of money of account, labor expressions 142 UNIVERSITY OF CALIFORNIA AT LOS ANGELES THE UNIVERSITY LIBRARY This book is DUE on the last date stamped below AUG 25 19A NOV? Form L-9 20m-l, '42(8519) IJNiVERSiTY OF CALIFORNIA AT HG 538 K62e Univefsily of Calilornia, Los Angeles L 007 061 006 8 .K, qcr^inNiAi I IBRARY FACILITY AA 000 992 394 7