Lyman E De Wolf.

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

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England and the Mediterranean ports for China and the East
Indies, during those years were 1,917,500,000 francs, 76^ per
cent, of the entire exports from France. This demonstrates not
only the efiect which mint regulations have in determining the
value of these metals, but the damaging efiect which flows from
tying money to coinage, in order to enable men to deal with the
despots of Asia — or Europe either.


The apprehensions of a fall in gold, and a rise in silver,
occasioned by this drain, induced the Bank of France, and other
large holders of sUver, to refuse to exchange with the English
silver for gold, at par, and England was thus forced to resort to
the money changers of the continent to obtain silver,upon which
they had to pay a premium, to enable them to liquidate the
balance of trade with Asia, occasioned by the demand under
their laws making silver a legal equivalent, instead of gold.

Having, as is believed, explained and illustrated the arbitrary
and unju°t principles of coinage, as connected with the business
affairs of every day life, far enough to give a just idea of the
control, and of the damaging effect which flows from it, it is
now proposed to examine >, as a principle of power, connected
with, and developed by Kings or Sovereigns— a more fearful
history of outrage and wrong cannot be given.

Througli this potent instrumentality for unnumbered centuries,
the iron heel of despotism has been firmly planted upon the necks,
and deeply imbedded into the living flesh, of earth's toiling
millions. Its pathway has been through fields of blood. But
the time has come at last when the people begin to demand a
reason for this tyrannical sway. They desire to know the secret
of its power, and every link of the golden chain must be
inspected and weighed, before the tyrant can be dethroned.

Gold and silver was first coined by the Lydians at the close
of the ninth century B. C, and by Greece proper at the close
of the eighth. William the Conqueror issued no coins, but
silver premiums or sterlings. Henry III. coined gold pennies
yij of a pound tower for 20d. Henry VII. first coined silver
shillings. Silver half pence and farthings were coined from the
time of Edward I. to Edward VI. The first copper coinage in
England was xmder Charles II. in 1672. Henry the VII. coined
the first sovereigns of gold, 23 carats, 3^ fine, in 1489. In 1544,
Henry VIII. coined half, quarter and eighth sovereigns, of the
present standard of 22 carats fine.

Charles 11. coined the first African gold, in 1675, and from
this circumstance the coin was called a Guinea. Nearly, if not
all of the sovereigns of Europe falsified the moneys they coined,
by decreasing the weight and fineness of the metal. This
fraudulent act was done to enable them to pay their debts by
this dishonest practice.

In the Roman Empire, 550 B. C, in the reign of Servius


Tullius, the as or pondo contained a Roman pound of copper ;
in 175, B. C, it had been reduced to ^ oz., or J^ part ot its
original weight.

In France, under Charlemagne, the livre contained twelve
ounces of pure silver. It was reduced by his successors, Philip
le Bel, and the first sovereigns of the house of Valois. There
was seventy-one alterations in the coin in nine years by John the
Good. By edict of Nov. 27th, 1359, the mare of pure silver
were coined into 18 livres, by that of January 22d, 1360, into 54
livres — March 22, 1360, into 125, and so on to the end of the
chapter. These changes, wliether lowered or raised, were the
source of enormous wrongs and frauds. The subject was not
only cheated by the sovereign, but subjects were thus licensed
or compelled to cheat each other. This debasement of the coin
continued till the reign of Louis XV. From 1497 to 1602, the
livre was reduced from 2.225 to 1.208 centigrammes of pure
silver. In 1789, the livre contained ^'/g'y of the pure silver,
that it did in the reign of Charlemagne. Journal des
Economistes, Paris, September, 1862, p. 372, 373 — Moran p, 12.

Henry the VIIL was the first sovereign in England who
debased the sterling value of the coin. The shilling of William
the Conqueror, contained 266/5- grains tower, or 249f grains
troy of pure silver; it was reduced by Edward VL, in 1550, to
21^ grains tower, or 20 grains troy. The English mint used the
fewer pound until the 18th Henry VIL, when it was replaced by
the troy pound, which is f of an oz. heavier.

The following table shows the changes of value in the silver
coinage of England :

i Conquest A. D. 1066.

• 28 Edward L A. D. IS
18 Edward III. A. D.
20 do do do
25 do do do
t3 Henry IV. do
g4 Edward IV. do
l8 Henry VIII. do
34 do do do

56 do do

37 do do

3 Edward VI.

4 do do
6 do do
1 Elizabeth
3 do
6 George III.


1346 .
1526 .
1543 .

Standard or fine

silver in pound

of li oz.

11. oz.

10 oz.
6 do
4 do
6 do
3 do

11 do
11 do
11 do
11 do


do .

do .

do .

do .

do .

do .

do .

do ,

do ,



Standard silver
coined into
per lb I per lb.
Tower | Troy

208. Od
20 3

25 6


37 6

42 2!yi 45 s. Od





- 72



Grains Troy
of stand, sil.
inone penny

,.20 ..
..18 ..
..15 ..
..12 ..
..10 ..
..10 ..
..10 ..
•- 6%.,
.. 6%


Grains Troy
ol' fine silver
in one penny








7.50 ..

Thus it is seen, that during eight hundred years, the gold


standard measure of England, under kings and parliaments was
a cheat and fraud of the most stupeuduous character, involving
the rights and the interests of the industrial and business classes
of that great nation, making these in fact the mere dice of
royalty and its retainers

Pure gold is 24 carats fine. The carat is an Abyssinian weight
divided into 4 grains, the grains into quarters. A carat grain is
equivalent to 2|- dwts. The English mint standard of gold for
their coin at first was 23^ carats, 3^ grains fine, and ^ grain
alloy, this continued to be the standard until 18 Henry VII. who
iheu introduced a new standard of 22 carats fine and 2 carats
alloy. Both these standards were used by him and his success-
sors until 1633. From that period to the present they have been
22 carats fine. Standard gold has ever since IVIY, been coined
into £3. I7s. 10^ per oz. By the act of 1844, the Bank of Eng-
land, as has been shown, is obligated to purchase all the gold
bullion and foreign coins of standard fineness, at £3. 173. 9d.
per oz.

Debasement of coins was universal during the middle ages.
In Scotland, previous to 1296, the pound of silver was coined
into 20 shillings. In 1601, £36, or 720 shillings were coined out
of the same quantity. The gold ducat, or sequin, when first
coined, in Venice, in 1284, was equivalent to 3 Italian livres;
to-day it would be worth 22 livres. The florin, originally a gold
coin of the value of about 20 shillings sterling, ($2.50,) is now a
silver coin worth about 20 pence sterling, (40 cents.) The
Spanish coin, maravedi, in 1220, weighed 24 grammes, (370)
grains troy of gold ; it is now a small coin equal to -^W of an
EngUsh penny. The Russian rouble of 1700, is worth 2^^*^ of
the roubles of 1821.

But besides, the kings not satisfied with the gains made by the
frauds committed in changing the value of the coin, naturally
went to robbing. Charles the Second, robbed the bankers, or
goldsmiths of a large sum of money, on two occasions. It had
been deposited in the exchequer for safe keeping, where he seized
it, and appropriated it to his own use. The amouni taken was
£1,328,520, or in dollars, $6,642,650, a large amount for that

Charles the First, at one time seized £200,000, deposited in the

mint, and Charles the Second, robbed one banker of £416,722.

These fiauds and robberies constitute but a small share of the



■wi'ongs and outrages perpetuated through the coinage system.
Its accumulation in large amounts is the inevitable result of
making it a legal tender for settling balances — this invited rob-
bery, royal and otherwise. This catalogue of crime may be
summed up as follows : largely increased value, debasement of
the coin and robbery are the natural fruits of the system. That'
governments have no right to fix the piice of labor is generally
admitted. Yet the wrong inflicted by such an act would bear no '
comparison with the one which arbitrarily fixes the price of any
one commodity, thus making it a medium for controlling, and at
the same time of deranging the price of every other commodity,
or service.

Yet the plea that is put forth for the continuation of this
outrage is, that other nations have adopted coinage as a common
medium of exchange, and therefore, that we in order to deal with
them must follow in their wake. A very little sober reflection
will show the fallacy of this argument. Mint regulations have
no force beyond the nation by which such laws are enacted. Our
coinage will not aflect the value of the metals abroad, their laws,
not ours, will govern. If these laws increase the value of the
metal we shall to that extent be benefitted. If, on the other
hand, the market value depends upon the law of supply and
demand, then intrinsic qualities of the metal for use under this
law will control the value, so that under any view which can be
taken, coinage laws are unnecessary. All that is required is to
authenticate or stamp the weight and quality of the metal by
national authority.

Coinage and mint regulations for the home market are as
unnecessary and mischievous as every other law would be, which
attempts to regulate values by arbitrary enactments, instead of
permitting the law of supply and demand to control. And we
have not, and probably never will have, coin adequate for one-
twentieth part of the business of the country. If we had, as
gold and silver are commodities, they cannot be held in suf-
cient quantities to supply the money as Avell as the market
demand for their use.

Besides, the cost of coinage is a serious obstacle in the way of
circulating coin. In England, coinage of gold costs une-half of
one per cent., and silver probably one and a half per cent.
In France gold costs 0.193 per cent — silver 75 centimes for every
100 francs, or -| per cent. In Russia, gold costs -j%\ per cent.,


and silver 2-iVj. While in the United States the estimated
expense of coinage of all metals is as follows :

At Philadelphia 2tVo per cent.

New Orleans ^too

North Carolina 9

Georgia ^^ih

Thus it Avill be seen that in the United States the cost of
coinao-e is much larger than elsewhere, and more than double
the cost which would be necessary to furnish a paper cii-culation
upon a just business basis. No account is taken, either, of the
waste of metal, in coining, nor of its rapid wearing out by use.
Then again, we are a commercial people, our coins would not
only flow out, but the coin of other nations would soon flow in,
and like all other nations who have tried the experiment, we
should find the market flooded with the diverse depreciated, and
oftentimes counterfeit foreign coin.

In the commercial portions of Europe while coinage was at
the zenith of its glory, their marts of trade were flooded with a
diversified coin like those of Germany and Italy, business men
were obliged to resort to the patriarchical mode of making pay-
ments by scales. Tables had to be constructed of the various
coins in circulation, and their respective values designated in
the money of account of the place where they were to be used.

In Kelly's Cambist (page 154) is the copy of a table, made by
Sir Isaac Newton, in the same volume several of recent date may
be found. These tables show that there were thirty gold coins
called ducats, twenty-five of which were from different mints,
with difierent impressions. Scarcely any two of which were of
the same value. There Avere twenty-three gold coins called
pistoles, from nineteen different mints, differing in value and
impression. No less than fifty-one coins, called rix-dollars, were
in circulation from twenty different mints, and of varying value.

This enumeration of coins, comprises but a small portion com-
pared with the whole of Europe — much less compared with the
coinage of the world. It is sufficient to show the character of
the difliculty arising from a diversified coinage, though giving
no adequate idea of the doubt and difficulty introduced into busi-
ness by the use of standard measures of value.

These royal robberies and frauds, multiplied, and diverse coin
bearing the same name, differing widely in value, counterfeiting,
sweating, fiUng, plugging and cheating on private account, the


dangers of robbery in holding and transporting, together with
the loss occasioned by the natural wear of coin from incessant
handling, were prominent among the causes which led to
a universal use of the moneys of account, or itl^al moneys of the
banks of Venice, Genoa, Amsterdam and Hamburg. Business
raen were glad to find a refuge in these, from the intolerable
evils of coinage. The bank money of Venice, for five hundred
years bore a premium over coin, averaging over twenty per cent.

Colwell, in his admirable work, thus sums up the evils of the
coinage system : " The history of coinage, for nearly ten
centuries, is a history of public frauds and private injuries, of
confusion in prices, and in moneys of account, of immense gains
as well as losses by governments, and still heavier losses without
gains by the people. These mischiefs may be credited without
hesitation to the continued effort to maintain a fixed price and
forced circulation for coins, and to the fraudulent debasements
to which these efforts opened a door, and afforded a temptation.
This history affords no lessons more worth remembering than
that governments should not, and cannot, fix the price of the
precious metaU, even in coins^ beyond the demand for the retail
trade ; that there should not be any other price for the precious
metals, whether coined or uncoined, in the large transactions of
commerce, than that which is made by the law of prices, and the
course of trade. The history of money, [coin,] shows that few
greater grievances can befall a people than a deranged coinage,
and money of account ; few evils have drawn from the masses
of a nation more bitter complaints. But for the great advantage
of coins in small transactions, it had been better that no mint
had ever existed.'' Colwell, page 138.

Experience, however, demonstrates that even in small change,
paper is more convenient than coin ; the only difficulty is its
rapid destruction by use. Some easier and better mode for
changing the soiled and worn fractional currency, is all that is
required to make it much better than coin.

The history of coinage is far from showing either uniformity
of value or use, much less does it show that its use has been

The use of- representatives of value is coeval with the history
of the race- — but the material used has by no means been uni-
form. Salt is used in Abyssinia. Codfish in Iceland and New-
foundland. Slaves and oxen were used by the Anglo-Saxons —


"Westminster Review, Janury 1st, 1848. Iron was used by
Lycurgus and his successors, for some five hundred years.
Tobacco in Virginia. Corn and wheat in Massachusetts.
Leather by the Carthagenians. The bark of the mulbei-ry tree in
China, and notched sticks were used as exchequer bills, in Eng-
land as late as at the beginning of the 18th century. Finally,
the whole system in Europe and America, has culminated in the
use of paper almost entirely, for all the practical purposes of
making an exchange, and gold and silver are used merely as
commodities, in settling balances — and there is just as good
reason for going back to barbarism, and adopting any other
barbaric mode of excliange, as there is for continuing the use of
coin. To avoid the endless weighing process, coinage was
adopted. The state then used it as an engine of j)o\ver, oppression,
fraud, outrage, and wrong, to escape from these intolerable evils
paper representatives have been substituted. But the principle
adopted being the same, as that which underlies coinage, all the
frauds and robberies inflicted by a debased coinage have been
more than preserved under the paper representative system. A
double fraud is now thereby inflicted upon the people.

There is no other remedy for these accumulated evils, but by
a repeal of all currency, coinage, and gold bond laws — and the
institution of a paper money based upon property, and not any
species of property, and under the absolute management and
control of the State.

Whatever contracts may have been made, requiring payment
in coin, should be settled at the earliest possible period, and no
legislation should be permitted by the American people,
which through the instrumentahty of money and bonds looks to
the further support and building up of a moneyed class by the
Government, at the expense of the industrial classes.



The vague, indefinite ideas which men generally entertain as
to the proper mode of instituting a money, its functions and
powers, arise not only from the want of attention to the subject
on the part of the people, but there has been a studied design on
the part of those benefitted by the system, to make these laws as
intricate as possible, for the very purpose of not having them
understood by any body, but themselves. In the charter to the
Bank of England, there was no direct power granted, authorizino-
the Bank to issue paper or currency, and the real design of the
institution was not understood until a long time after the passao^e
of the law creating the Bank.

But the tendency of education, under these partial laws, and
the false customs and habits of thought created by doing busi-
ness through this channel, all point in the same direction. The
concealment of the gross injustice contained in the laws institut-
ing money, or that which is designed for, and is necessarily used
as money.

Again, the isolation of men engaged in the industrial and
useful occupations of life has in a great measure removed them
from those channels of business and sources of thought which
are necessary for forming accurate opinions upon this subject.

The power of money is artificial — not natural — legal — not

In all legitimate and natural occupations there is more or less
connection between the service performed and the compensation
bestowed. No arbiti*ary enactments, no special grants, nor
partial laws compel labor, or regulate its rewards. But in
the institution of money, the depletion of the many, and the
enrichment of the few ; class and caste are the supreme objects
of the law instituted, its rewards are mere arbitrary legal
extortions, and its objects are simply diabolical or infernal.

In useful industry there is a natural demand and a natural use
to be performed which is neither to be ignored or shirked. Its


due performance is indispensible to the comfort of the individual,
and the welfare of society— its rewards directly grow out of the
service performed. Neither patents of nobility, nor charters of
special privileges are necessary— the grant is from the Supreme,
and the mandate to every son and daughter of Adam, is " in the
sweat of thy face shall thou eat bread." It is this overshadowing
oblit^ation and sense of duty which with the masses of men, calls
into exercise every mental and physical power. Every days
necessities, and every days duties increases the responsibilities,
and deepens the channel in which these thoughts run.

The obligation and the power thus exercised are indivi'hial or
personal, not legal, institutional, or aggregate. Hence nothing
is, or can be further removed from the mental philosophy of every
day life than the unjust legal power, and unjust legal rewards
allotted to the money class through these extremely partial

The charter of every day life is justice in act. The charter of
the money power is a special dispensation, which to the chosen
few, annuls the conditions imposed upon the ignoble many. The
love and practice of the former, is a necessity for the develop-
ment and growth of humanity of the latteryXa utterly to pervert
and destroy it.

None of the '■'"many inventions^'' devised by human wit, and
human folly, have so effectually chilled the finer sensibilities of
the human heart, and perverted its nobler powers to the worship
of self as has this unjust institution of money.

No wonder that the Saviour of the world proclaimed it " easier
for a camel to go through the eye of a needle, than for a rich
man to enter the Kingdom of Heaven." No wonder that the
apostle James declared that the "love of money is the root of all
evil." No wonder either that men following the god-ordained
and useful occupations of human society, and human life find it
so difficult to comprehend its principles, or imderstand its mani-
fold workings.

If the milennium is to dawn on earth, it must be long after
the extinguishment of this unjust power, unless humanity shall
find some new mode of development and progress, more rapid
than any yet discovered.

How can it be expected that men who are licensed to break
every natural law, and thus to violate the golden rule, will con-
sent to be governed by its holy teachings. Why license a few


men to charge a certain rent for their unsecured ijo rent bearing
promises, and require the people in return to give tijeir well
secured rent or interest bearing securities. What justice, human
or divine, is that which thus commits to any class of men the
right to use the sovereign power of the State for their own
private gain, and to substitute their faithless promises in the
place of what ought to be the lawful money of the State, and in
addition to this to determine arbitrarily how much, or how little,
a free people require to transact their business in making
exchanges of property.

It is not the abuse of the banking or money power of the
Government, which inflicts deadly harm to the best interests of
society — the abuse is in the grant of power itselt. It is based
upon the , assumption that the state has a right to abdicate
sovereignty in favor of a class — that money instead of represent-
ing the property, justice and sovereignty of the people, should
represent the interest, property, and sovereignty of the banker —
instead of being made to enable*the people to make a just, easy,
and cheap exchange of their property, is made to be hoarded up
in the vaults of a bank to be used as a legalized commodity or
agent to suit the convenience of bankers and financiers, either to
redeem their faithless promises called " currency^'' or to other-
wise fleece the people as the interest of the financial classes
demand.. But the people are beginning to enquire whether the
value of this "currency" depends upon the money or bonds of
the State, locked up in the bank, or npon the property of the
people which it exchanges ; and if upon the money or other
security, then they they want to know why not circulate the
money or security itself If it depends upon the avails of their
property, why pay the bankers for plundering them ? What
additional security do they add to the money, or to the bonds, or
what security does their bank paper furnish ? Is it in the intrinsic
quality of the paper or beauty of design, or is it in the splendid
autographs of soulless corporation ofiicials ? These — all these
have furnished no security in the past. What indemnity do they
promise for the future ? Where and what is the present actual
value of the currency as based upon a j^resent ability to redeem
out of the bankers and financiers own property ? or where or
what is the security to the people for their deposites, and the
echo of a thousand years answers, where ? The prophet's vision
of the valley of dry bones may resurrect and clothe them with


living flesli, but it can never resurrect the departed millions lost
by bank failures— return the lost deposites, or restore to the
people their long betrayed rights— these under the banking
regime are never to be restored. The only infallible remedy for
these wrongs is the institution of money upon principles of justice,

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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 5 of 19)