Lyman E De Wolf.

Money; its uses and abuses, coinage, national bonds, curency, and banking, illustrated and explained online

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Coinage, National Bonds, Currency,






Entered according to Act of Congress, in the year 1869,
In the Clerk'3 Office of the District Court, for the Northern District of Illinois.


5 The aim of this work is to furnish for the business and labor-

OQ classes a correct outline of our present unjust financial system,
as well as an accurate idea of the principles which must be
embodied in the national laws to institute a just system. The

-. facts and principles enunciated have been well and fully weighed.

»- The publishing has been more hasty perhaps than was desirable

^ in a work of this importance. The gross and unjust demands of
capitalists, coupled with the disordered state of the National
finances which their false system has mainly produced, rendered
the publication of such a work necessary, and at the earliest
possible moment. That there may be some typographical, as
well as more grave errors, ought perhaps under the circumstances
to be expected. But whatever may be its faults, it is believed,
^that it substantially sets forth the wrongs of the present system
with the remedy to be applied in a manner so plain that it can-
not fail to be interesting and useful to all classes of men who
desire an honest and uniform currency or monjey_at cost, and thus
prefer that right and justice shall be established in the most
fundamental law of the nation in ijlace of class inequality and
gross injustice.

Under such considerations the work is submitted to the impartial
judgment of the American people.



Inteoduction — Origin of Money — Page 1 — 8.


Abstract or Ideal Money, is the language of prices, by which all
civilized nations estimate values — Pages 9 — 29.


Coinage — Its history and use — Not a standard of value, but of
payment, controlled by statute law — An instrument or class
power to subserve the purposes of the ruling' and financial
classes — Pages 30 — 46.


Money — A legalized agent — A public certificate, tally, or counter
of value or service rendered — It is neither a standard of value,
a measure of value, nor a representative of value — But it is
an authentic standard of payment — Pages 47 — 57.



A Bill— To establish a uniform cun-ency— Pro vide for the liquida-
tion of the National debt and for other purposes— Currency or
money, a true index of the sense of justice and sovereignty in
a nation — Pages 58 — 6Q.''


State Paper currency even badly instituted, universally good :

1. Example — Bank of Venice — Circulated the debt of the State
over 500 years, at 20 per cent, premium over coin and bul-
lion — Pages 67 — 72.


2. Bank of Genoa — A State-paper-money with stronger guar-
ranties tlian the Bank of Venice^ but less efficient — A neces-
sity to avoid the use of coin — Issued the first bank-bills —

Pages 73—81.


3. Bank of Amsterdam — A state paper-money to avoid the evils
of a diverse coinage — Pages 82 — 86.


4. Bank of Hamburg— A state-paper currency similar to that of
Amsterdam— To avoid the use of coin, — ^Pages 87 — 90.


Bank of England— Origin and history— Like the Government,
it exists on fiction, (a gold-base)— A ponderous, expensive,
cold-blooded despotism— The lesson taught— Pages 91—120.



Bank of Scotland — ^Not a gold-base fiction — Cash credits, or the
property it exchanges, its operative principle — The English
suspicious of bank paper — The Scotch like it better than
gold — Pages 121 — 140.


Banking in the United States in colonial times — Pages 141 — 144
— Continental issue, not money bnt a coin bond— Pages 145—146
— Bank of United States and State systems, a species of bank-
ing brigandage without capital.

National Banking — A revised edition of the English system
— The Government furnishes the guaranties. Bankers control
the issue — Labor pays the losses and expenses of both and at
double the English rate — Pages 163 — 70.


Irredeemable currencies — ^Assignat of France, Russia and tho
Mississippi Bubble Act — Revolutionary issues based on force,
or the exigency and schemes of rulei-s — Not money — Pages


Elasticity and convertibility — Cabalistic terms used by bankers —
The first ostensibly denoting contraction and expansion of the
currency — The latter coin redemption, really a decoy or cover
to hide the practical workings of the system — Pages 176 — 185.



Interest on money viewed in the light of reason and revelation —
The most essential instrument to produce inequality in the
distribution of property — Pages 186 — 190.



Currency fluctuations contrasted with coin — And premiums on
gold shown not to be a test of over-issues-^'Pages 191 — 196.


The proper adjustment of the National debt, and the estab-
lishment of a National System of finance, is the great and all-
absorbing question to be settled. In fact it is the Aaron's rod
of the hour, -which, if it does not swallow up all other issues at
no distant day, it will be a consuming fire to burn out the in-
dustrial interests of the nation. If the question of finance does
not become a disturbing element which is destined immediately
to agitate this whole country as it has never before been agitated,
it is not from any lack of importance, but because its over-
shadowing power has not been manifested in such a manner as
fully to attract the attention of the public mind. The vague,
undefined, and indescribable presentiment of the people, in re-
lation to this incubus power, although they have failed to com-
prehend it, may be sufficient to arouse inquiry, and to suggest
the propriety of considering the matter well, before they per-
mit the nation to take a final plunge into the bottomless ocean
of European consols and European finance. Financiers, pleas-
ed with the delightful prospect of one hundred and forty-five
millions of dollars annual gold interest, as a commencement,
may overlook the small item of hard blows which labor must
deal to earn this trifling annual tribute paid to capital, before
laborers can be permitted to feed and clothe their own families.
But insignificant as this small item of labor may appear to the
donee, the donor will not fail to weigh the task with difi'erent
scales, and to treasure well the lesson taught.

A consumed or minus capital, which, through interest, gnaws
at the vitals of labor, at the rate of twenty-four millions of dol-
lars per year faster than England's hated debt, will not fail to
make itself felt in a nation's depleted granaries and empty
purses. This amphisbgena of European despots, will crawl in
every direction to scent out labor and its products. What can
not be secured to capitalists in the form of bonds, can easily be
gobbled up in National banking, based on these bonds. In this

complicated machinery lies hid the power which determines the
price of labor and of property without regard to the cost of
production, or the compensation of the laborer. In this, too, lies
the unequal annual distribution of property between laborers and
the so-called capitalists. As the nation is now, or soon will be,
afloat upon these questions and upon the reconstruction of a new
system, will it not be well for the people themselves to under-
stand what is included in this reconstruction issue ? Recon-
struction in its wider meaning, includes not only the establish-
ment of civil order in the South, but the re-arrangement of our
industrial and financial system North and South.

This condition of the industrial and financial afi'airs of the
nation, while it is apparently the legitimate fruits of war, is
really the fruits of a false system which war has probed down
to the bottom and brought out to public view. Heretofore our
financial laws have been the outcroppings of monarchy. Not-
withstanding our Republican or Democratic theories of gov-
ernment, our monetary laws are merely a reflex, or a very
vicious imitation of the English system, an ingenious, artful,
overreaching device invented by financiers and statesmen in the
interest of kings, — supreme selfishness schooled in kingcraft,
and steeped in despotism. Finance, thus originating, may
properly be defined to be the genteel kingly art of rendering a
very small incidental benefit to the governed, for the purpose,
primarily, of securing the more essential rewards of industry to
the non-industrial and non-useful governing or controlling class.
In ancient and barbarous times, when the power of the king de-
pended upon the length of his spear, or his expertness with that
and his bow and arrow — a banking bow and arrow finance, an
exchequer bill, or the kingly currency was a notched stick, and
his royal revenues were gathered and exchanged by it, his ex-
chequer and his granaries were filled by tithing. The real
character of this finance or the doctrine of the divine right of
kings which is the foundation of the whole system, may be
thus vulgarly expressed: the Divine Being through this
divine bow and arrow, of mine, has ordained that unto us is
committed the labor to govern, and unto you, our well beloved
subjects, is allotted the important duty of doing the work. You
and yours shall earn the living, and I and mine are or-


dained to eat it. This is the divine right of royalty. In my
sacred person is justice and judgment ; I decree what shall be
done, and thou shalt do it ; kings command but subjects must
obey. The primary law of obedience is to feed royalty. Its
dignity and its power must be maintained at the expense of la-
bor without regard to the interests or the rights of the laborer.
Royalty is, therefore, a nightmare enthroned on the back of la- .
bor. But the tithing by which royalty was supported, was
only adapted to answer the purpose of a very ignorant and bar-
barous age ; an age when a notched stick furnished a circulat-
ing medium, and was the king's accountant ; an age when the
royal signet or seal manual stamped on wax might be a conve-
nient mode of supplying a royal misfortune — the great incon-
venience of not being able to write. When a higher intelli-
gence superseded this ignorance and barbarism, the king's ex-
chequer bill changed its form, and his exchequer was filled by
a mode more convenient than tithing. So long as his supplies
depended materially upon the length of his bow or the swift-
ness of his arrow, a portion of the annual fruits of industry
and the increase of the flocks and herds could be gathered by a
royal tithing decree ; this answered all the purposes of well fed
royalty, and the empty stomach of the subject was a fitting
symbol of loyalty.

But in a more advanced stage of society tithing is too ex-
pensive, and the king is cheated out of too many pigs, lambs,
turkeys, geese and chickens. Besides long transporting lines
are suggestive. They might suggest the inconvenience of this
ancient revenue procedure, or raise a doubt as to the king's
right. Hence, royalty might be contaminated by too near con-
tact with the ignoble many. The sober enquiry of subjects,
sharpened by the serious suggestions of an empty stomach
might prove very damaging to royalty and loyalty. To avoid
unpleasant enquiries, expedite exchanges and furnish the king
and his retainers their supplies, required a cheaper, more ex-
peditious and less suggestive system of finance. But it must
not be forgotten that in those early ages of the world as well as
to-day, the essential requisite of finance was to benefit the rul-
ing class — to enable the subject or citizen to make an easy and
just exchange of his products is the merest incident. Hence,

the representative power of money— its accumulation by way of
interest— its control thereby over property, and its exchanges,
impost duties, licenses, stamp-acts, and other similar ingenious,
but delusive devices, which are necessary to support royalty
without enquiry and at the expense of labor, are the substance
of the ancient royal tithe. If tithing was oppressive, how has
the modern financial devices improved the matter ? Let Europe's
pauperized and nobility-ridden laborers answer. From these
prolific sources of kingcraft, selfishness, public weal and inex-
orable necessity, the doctrine of representatives or bonds and
money were born.

When political economists, therefore, attempt to trace the
medium of exchange back to the division of labor as its source,
and thus to account for this labor robbing system of money, or
when they claim the system as the result of an honest efibrt of
human wisdom, and the insurmountable difficulties which legis-
lators have experienced in their attempt to found a just system,
it is simply the play of Hamlet, with Hamlet left out. It is a
kingdom without a king. If not a headless system, it is a body
with a false head. The motive or governing power is hid be-
neath the rubbish of specious terms, it makes labor and its
necessities the creating or forming power. The central
principle or the divine right of kings under this fine spun
theory is merely the passive agent, which, under the genius and
all controlling sway of a diversified industry, has brought into
the world this representative monstrosity of labor called money.
This is a libel upon labor. Industry is the handmaid of honesty.
She blesses the world with fruitful fields, provides our hab-
itations, feeds and clothes us, and furnishes us with the useful
and ornamental things of life. But she has seldom tried her
well trained and skillful hand in the magic art of forming govern
mental systems, or for securing her own rights. If these results
are to be attained ; if the world is to have a financial system,
the product of labor, and therefore its honest and efficient
agent, it must be the work of the coming age, and labor must
gird herself with strength to fill the long delayed requirement.
The labor element of the world has been the pack-horse of kingly
policies and kingly power without compensation long enough,
and it is for the American people now to cut loose from Euro-

pean policies and this European finance, to build an American
system based upon the property and sovereignty of the people
and the inviolability of their rights. Why should we continue to
pattern after their false systems, unless it is for the re-produc-
tion of Europe here ?

Our governmental theory recognizes the people not as subjects
but as sovereigns. Why should not our laws conform to our
Government theory ? If the people are competent to choose
their rulers, why are they not competent to choose their money ?
If they are competent to furnish all the products, why are they
not competent to furnish the money to exchange their products ?
If money is made solely for the purpose of exchanging products,
why should it not be under the control of those who have pro-
ducts to exchange ? If the people, through the Government,
have the exclusive power to coin money and regulate its value,
why should not the money be under the exclusive and direct
control of the power which creates it ? If the people, through
the Government, have the power to say what shall be money,
and how much shall be had, why permit any body else to inter-
fere in this matter ? If Government bonds are to be the base
of the money, why not give the bonds for the money and the
money for the bonds ? If the government or the people are
good as surety why not as principal ? If the people who earn
the property do not know how much money they need to
exchange that property how can the bankers tell them? Why
should government and people be under the perpetual pupilage
of soulless corporations, heartless money-changers and gam-
bling stock jobbers? If the capitalists have furnished the
money and taken the government bond is not the bond and the
interest full pay for the money ? If so, why should they be
permitted to have back their money and draw interest on their
money and on the bond ? Is not one interest enough ? If the
farmer furnished the grain and has taken a bond why not let
him have back his grain with the privilege of drawing interest
on that and on his bond ? So of the soldier and every man who
has furnished the government material aid. Again, if the bond-
holder furnished money to the government worth forty cents on
the dollar at the time of furnishing it, if he is to have the sixty
per cent, paid to him by now agreeing to pay him in orold ? Why

not pay the soldier and the farmer and every body else in the
same manner and at the same rate ? But, above all, what will
be the effect of destroying the greenback and surrendering up
to the capitalists the exclusive right to furnish the money?
Will they not thereby be enabled to draw a double interest out
of labor to control the price of labor, products, and government
bonds ? If the government desires to pay the bonds or lower
the rates of interest, must it not do so upon the capitalist's own
terms— the sale of bonds at a large discount, or by an increased
taxation of the people ? These are the serious questions pre-
sented not merely for congress to settle, but the working
men and business classes ; they must decide, and that, too,
promptly. The interest of capitalists will now be pressed upon
congress with all the force which money and talent can com-
mand. Their pensioned attorneys will occupy not only the lob-
bies but representative and senate halls. Where are the peo-
ple's advocates and what are they doing ? Will they tamely
submit to be thus badgered and cozzened in the destruction of
the greenback and in the payment of the bond in gold ? These
questions are too serious to be trifled with and too urgent to
admit a moment's delay. If the people desire their rights
they must look after them at once, and determine for them-
selves what legislation their interests demand. If a farmer
seeks a farm or a business man the choice of a business for life,
personal attention is needed. How much more important is
the question which is to determine the distribution of the pro-
perty of a great nation, giving to each an opportunity to ob-
tain his just share of the annual products instead of dividing
them between the producer and capitalists by law, and thus
binding heavy burdens on the shoulders of the former solely
for the benefit of the latter. And let it not be overlooked — the
instrumentality by which all that is effected is national bonds and
the national institution of money. We must now either adopt
a new system and one which respects the rights of the people or
else we must continue the old — the present fluctuating, labor-
robbing and business-destroying financiers system. To determine
these questions intelligently requires an accurate knowledge of
the character and effect of fundamental laws, and especially
lihose relating to national bonds and the institution of money.



Bteon in his Don Juan commences by saying: "I want a
hero, not an uncommon want." This certainly is not our want.
"We are surfeited with heroes and would-be heroes. The serious
question, however, with us is : How shall we get down to the
affairs of every day life, and not break our necks in the descent ?
We have upturned every thing. Upon us the ends of the world
have fallen. Our conglomerate fabric of Democratic or Repub-
lican theories, based upon the European heirloom of feudalism,
has met a sad fate. It is useless now to spend time in quarreling
over what might have been. What was has been wiped out in
fields of blood. What is to be is a question and a work for the
future to solve. We cannot revivify the dead carcass of the dead
past. Let the dead therefore bury its dead, and let the American
people resolutely set themselves to work to upbuild an American
system, which, as a whole, shall respect their rights. It is the
people who have to pay for the governmental administration of
justice, whether good or ill — their property and their lives must
answer for all the crude, selfish, false theories and misdeeds of

The barbaric origin of money and the changes which an
advancing civilization has brought has been alluded to in the
preceding pages. The special province of this chaj^ter will be to
unfold the philosophy and use of ideal moneys — or the moneys of
account used in every civilized nation. Without a knowledge of
this branch of the subject it is difficult, if not impossible, to
unfold the science of money. Gold and silver are commodities
of great value. Though by no means as useful as many other
metals, yet for thousands of years they have maintained their
ascendancy as an universal equivalent for all balances in the com-
mercial world. The extravagant estimate placed upon them
smacks so strongly of the doctrine of the divine right of kings,
that it is impossible to resist the inference that both have a com-
mon origin. These metals, however, as coin, are simply legal
standards of payment, arbitrarily determined by statute law.

How far they are thus used as a medium of exchange, what ne-
cessity exists for such use, and precisely what that use is, the
people have a right to know. For possibly it may be true that
the office or use of coin is not exactly what it is generally
imagined to be. A better knowledge of the subject may disclose
the fact that many of the supposed functions of coin are
purely imaginary ; that these functions, even if they exist, can
be better performed through other less expensive agencies.
Among these agencies which require to be examined, and more
thoroughly understood, is the subject of ideal money, or the
money of account.

By ideal money, or money of account, is meant a denomi-
national or money unit and its fractional or decimal parts, as for
instance, dollars and cents, pounds, shillings and pence, etc. It
is a numeral of value or the language of prices in which com-
mercial dealings are carried on, contracts made, prices expressed,
and books of account kept. Or, in other words, it is the mental
image of value which the constant use of these denominational
units with their fractional or decimal parts, thus creates and fixes
in the mind. It is a mental habit pertaining to civilization in use
in all ages of the world.

Its origin may have been from an actual comparison of, and by
a perfect familiarity with, some material article of intrinsic worth,
as a coin or a metal of a certain quality of fineness and weight ;
but, however it may have originated anciently is a question of
little practical importance at the present time.

At this age of the world, men do not gain a knowledge of
values nor learn to estimate them by comparing one thing with
another, any more than they gain a knowledge of arithmetical
numbers, and of their powers, by comparing them with fingers —
but they do gain a knowledge of these denominational money
units, in the same manner that they gain a knowledge of arith-
metical numbers — and their power, as applied to values in fixing
prices and estimating values is similar to that of numbers in
ascertaining and determining quantities. People in the constant
practice of naming prices, making contracts, debiting, crediting
and settling accounts, thus acquire a knowledge and judgment
of prices and values which forms in the mind an ideal or mental
scale of equal parts which enables its practised possessor instantly,
and almost without efibrt, to understand the market price or
value of all articles, commodities, or services, and by arithmetical


numbers, without any additional aid from either coin or bullion,
to be able to determine ■with the utmost accuracy their actual
value and amount.

Sir James Stewart thus defines an ideal money, or the money
of account, and describes its uses :

"Money, which I call of account, is no more than a scale of
equal parts, invented for measuring the respective value of things

"Money of account is, therefore, quite a different thing from
money coin, and might exist although there was no such thing in
the world as any substance which could become an adequate and
proportional equivalent for every commodity.

" Money of account performs the same office, with regard to

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Online LibraryLyman E De WolfMoney; its uses and abuses, coinage, national bonds, curency, and banking, illustrated and explained → online text (page 1 of 19)