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Lyman E De Wolf.

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

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to be administered under the direct control of the Government.
The first and most important question, therefore, for the people
to solve, is contained in the simple query : What is money ? An
answer to this important inquiry wiU now be attempted to be
given. Money is the product of law, and may be defined to be
a legalized instrument or agent, created by the sovereign law of
the State, and designed as a national medium for the exchange of
products, or as legal fulfillment of a debt or obligation, created
by contract or service rendered.

The power to make or coin money, is one of the most essential
powers entrusted by the people to the Government.

The Constitution of the United States, Article I., Sec. VIII. —
5. provides, that " the Congress shall have power to coin money,
regulate the value thereof, and of foreign coin, and fix the
standard of weights and measures," and in Article I., Sec. X. —
1. It is further provided, " that no state shall coin money, emit
bills of credit; make any thing else but gold and silver coin a
tender in payment of debts."

From these constitutional provisions it will be seen, that the
power to coin or make money is vested solely in Congress. The
question to be considered is, how is this power to be legitimately
exercised by Congress, and what material and what instrument-
ality is necessary to create or institute money ? A deep and
wide spread opinion prevails among almost all classes of men,
that some material of high intrinsic value is necessary for the
institution of money. This opinion may go so far as to assert or
claim that nothing but gold and silver are, or can be made
money. But this idea is an exceedingly erroneous one, and it
can be so easily demonstrated that it does not seem possible
that any person who reasons can fail to perceive the error. This
last assertion, of course, relates to the real or intrinsic qualities
of money, considered as money, and has no reference to the
mere abstract, hair-splitting, legal, or constitutional powers of
government — these as used are only necessary to sustain the
usurpations of financiers or to exclude the rights of the people.
Taking it for granted then that the Government of the United



51

States, as it stands related to this question, like every civil
government, has the sovereign power to institute money if it
desires so to do, in any manner which shall be just and useful to
the citizen and to the nation.

What attributes or powers are necessary for the institution of
money, and how are they to be exercised?

First. There must be exercised or put forth the supreme or ,
governmental power ; and this must determine by law, denomina-
tions of value, of some easily appreciable, certain and definite
amount. Weights and measures owe their efficiency to the same
cause, and in the constitution are coupled with coinage, and
fixing the value of money, and there is an appropriateness in the
classification thus made, although it may be, and undoubtedly is
true, that arising out of the theory of money, prevailing at that
time, the idea was entertained that measures of value could be
constructed by pi-escribing the quantity and quality of metal,
which each coin should contain, which idea is wholly erroneous.
And, further, it may also be true, that no accurate measure or
designation of the value of property, labor, or use, ever has been,
or can be constructed upon that principle; and as has been seen,
money is not, accurately speaking, a legal standard of value, but
a legal standard of payment. Yet, notwithstanding this, the
subject matter of weights and measures as to quantities, and the
fixing of scales, counters, or denominations of value, belong to
this class of constitutional powers — both relate to the same class
of objects, namely : the exact, just and accurate measurement
and designation of property, and of all its uses as it stands
related to quantity, quality and value. Now, in weights and
measures, fixed and known quantities of property determined by
law, from the least to the greatest amount, conveniently divided
and designated by some general name, cognomen, or denomina-
tion, is essential to the idea of a measure. But when these
denominations or measures are fixed definitely, and understood
by the people, it is not essential that any particular object or
material should be used to represent the idea, intended to be
represented by the denomination used, other than the fitness of
the article or material used for that purpose. In long measure,
wood or some non-elastic, durable and light material is the best.
Neither gutta-percha, gold, nor silver are essential. A golden
yard stick would be much more expensive, not as durable, nor as
easily used as wood. Wood, therefore, is the better material



62

for yard sticks. The cloth measured by a golden yard stick,
would not wear any longer, or be any more useful, than it would
if measured by one made of wood. The same train of reasoning
applies to liquid measures, and to weights. Besides, by not
usimr either gold or silver in the manufacture of these measures,
the owners of gold, or the world at large— at least all those who
have to use gold are benefitted by having a more plentiful supply
for useful and ornamental purposes.

Thus it is in relation to denominational measures, or more
properly denominational designations of value. The attribute
of value is in the property, labor, or use. A certain quantity and
quality of property amount of service or labor, has a value
which is determined by intrinsic properties or qualities, and by
use. Now, money is merely a certain instrumentality, or agent,
selected and appropriated by law, accurately to express the
commercial value or use of the property, labor, or service.

This instrument, or agent, is purely a legal entity, and is
instituted by making a denominational unit, which shall uni-
formly express some convenient, certain and appreciable amount
of value in a certain piece of property, or in a certain kind of
labor or service. For the accomplishment of this purpose, and
for every desirable purpose in making an exchange, it makes no
difference whether this denominational unit is a dollar, a crown,
or a pound sterling, or whether the governmental power
expressed, represented or designated by the unit be a pebble-
stone, a notched stick, a clam shell, a piece of iron, copper,
silver or gold. Its value as money is purely a legral value, and
not an intiinsic one. It depends entirely upon its legal attri-
butes. It is a legal certificate or mandate of the sovereign power
of the state. It is in and of itself the product of the exercise
of the highest power known in the civil state. Nothing less
than the power thus exercised is competent to institute money.
Its use, or olRce, when instituted, is that of an authentic or
legalized counter or tally, and a pubUc order for the amount
named. For instance. A, has a horse worth a hundred dollars,
he desires to put the horse into a wagon worth also a hundred
dollars. B, wants the horse, is willing to pay a hundred dollars
for him, but he has no wagon. B,, therefore, pays the hundred
dollars for the horse, and it is in a stick of a hundred notches or
dollars, or in a greenback duly authenticated by the sovereign law.
It is a legal certificate, that the holder has furnished that



53

amount of property, or rendered that amount of service, and
which entitles the holder to obtain from the government, or from
any individual who desires to sell any property or service, which
tlie holder desires to obtain, and is in the eye of the law a legal
equivalent for such property or service to the amount, determined
upon by the money. A., therefore, takes his notched stick or
greeenback, thus authenticated and made by the Government a
legal tender, for all debts, public and private, and goes to C.
who has wagons, and buys and pays C. a hundred dollars for his
wagon. Who then will dispute the fact that this change or con-
version of the horse into the wagon, is effected at a cheaper rate
through this money medium than it could be by barter or by coin
and that the wagon and the horse, are each respectively worth
as much, and willperfoi'm as much use after the change of owner-
ship as before ? Nay more. The horse and the wagon were
perhaps in the hands of each of the original owners a surplus,
which neither could profitably use. In this transaction on a
miniature scale naay be seen the law, and the appropriate use of
money, in all the exchanges made in the world.

What then are the essential attributes of this money ?

They are :

First — That it shall be instituted by the sovereign law of the
state.

Second — That when instituted, it shall constitute a scale of
equal parts sufficiently small to enable parties to transact with
ease the least as well as the greatest amount of business.

Third — That this legal scale, counter, denomination, or tally,
shall be stamped on paper, or some other durable material, having
only an immaterial or nominal value.

Fourth — That this money when thus instituted, shall be a legal
tender for all debts, public and private, and be exclusively the
money of the nation. To these requisites there must be no
exception. This, and this alone, would be money.

If, however, money as is claimed by some, derives its attributes
from intrinsic worth, and that nothing bnt gold and silver are, or
can be made money. Then legal enactments which go beyond
the limit of determining the quantity and quality of the metalj
will neither add to nor diminish its value, and such acts, there-
fore, if not vicious, are supejrogatory, and for that reason, if
for no other, should be omitted. If, on the other hand, it derives
its efficiency entirely from legal enactments, then the substance



54

or material of which money is made, should have, as has been
before stated, only an immaterial, or legal value — otherwise, its
legal attributes of value when arbitrarily mixed or compounded,
with intrinsic value, will make a compound which like gun-
powder, if not as explosive and as destructive, will so combine, -
absorb and change its constituent elements and their value, that
none but savans can determine what the real value of the com-
pound is, or how it should be applied in determining other values.

Such indeed is now, and has been the result of all the moneys
which have ever been instituted on such or a similar base. Under
this system, of coinage laws, if they furnish a standard measure
of value, or determine anything else than the weight ^nd fineness
of the metal, from whence comes the premiums and depreciation
of coin ? Are they from the standard measure coinage law, or
from the intrinsic value of the coin, or are they the resultant
effect of both causes? If aye; how much is allributable to the
immutability of law, and how much to the intrinsic qualities of
gold? Where is the golden mean which will enable the people
to measure the values of their property ? or in plain english :
What is the measure of this standard measure with a premium
on coin, ranging from one to twelve hundred per cent, above —
or twenty per cent, below par ? How are the people correctly
to determine these questions, and of what use is a standard
measure thus instituted ? It serves the interests of the people
by betraying their rights. Millions upon millions of dollars of
property are taken out of the labor classes, by the increased
demand for gold, and its metamorphosis, of coinage, gold bon 1,
impost, and gold tender laws beyond their power of supply.
But, as this subject is examined at length, elsewhere, a reference
has been made to it solely, for the purpose of showing that a
standard measure of value cannot be made by connecting
denominations of value indissolubly to gold or silver, or any
other scarce commodity of high, intrinsic value, for the reason
that valine is an ever-changing property, dependent not only upon
intrinsic qualities, but more largely upon legal and commercial
uses, and that while the denominational value, does not, or can-
not change, its commercial or market value does change to such
an extent, as wholly to destroy the use of it, as a measure of
value, but under all these financial laws, it is the most powerful
agency, known, in misleading the people, and covering the
wrongs inflicted upon them; and thus, that money should not



I



55

rest or be built on any such changeable base. The remedy for
these evils then lies in the direction indicated in the previous
portions of this chapter, by the repeal of all coinage and other
gold laws, and by the institution of money based upon the
property of the people, and the sovereignty of the nation, and
placed exclusively under governmental control. A redemption-
money-system is merely a most odious, special, class-law-barter.

Whenever there shall be a money instituted and furnished by
the Government, at cost, at convenient and reasonably accessible
points, in manner, and amount, sufficient to enable every man
who labors, or who has property to exchange, to transact his
business with the facility it ought to be done ; under such a
law, even moderately well administered, there will be but few
contractions or expansions of the money market, but such as
arise from the increase or decrease of property and of exchanges.
Such an event as a financial crash for the want of money or from
its failure, would be unknown in the business vocabulary. It
would be as impossible as the failure of a deed, mortgage, or
bill of sale, a man, a horse, or steam engine, to perform the uses
or objects designed or appropriate to the sphere of each. Bank-
ers, brokers, and stock-jobbers, and the thieving created by
them would also cease, and there could be inaugurated a form of
society which nominally at least would approach a system of
equity and fair dealing among men. An event which can never
occur until coinage, banking, brokerage and public stocks shall be
wiped out by law.

Coinage, as has been seen, furnishes a deceitful standard of
value, and is the base of a fluctuating market, it is in fact a legal
and potent instrumentality to derange markets, but never con-
trols them but to the general injury of the producing and useful
business classes.

For what use then are bonds payable in gold designed, or
what good do they accomplish ? They are simply a perpetual
draft or drain upon the productive industry of a nation, to trans-
fer arbitrarily, and directly the property from the men who earn
it, to those who do not. Not only so, but they transfer it from
those who would perform a real use, to those who are no real
benefit to mankind, unless extortion, stealing and robbery, be
deemed a benefit or use — gilded rights and squalid poverty mark
their pathway. But ah ! say these gentlemanly capitalists, the
object of coinage is to furnish a standard measure of value.



56

When and where did such a standard practically exist ? Its
mythical character in premiums and depreciations of values has
been shown, and there is no need to repeat the lesson taught.
But then it is said, the object of bonds is to get money. The
Government wants money to carry on all its varied operations,
and its bonds, are issued as in the late terrible war, solely for this
purpose. With an air of triumph it is frequently asked, how
would the Government have carried on that war without the
aid of the bonds, and capitalists ? The answer to the query
is : The Government wanted first — men, and it issued its man-
date, and obtained them. It wanted money to pay for the
services of the men, materials and munitions of war furnished,
and it issued the greenback, and with it, paid for the services of
the men, and for all the matei'.als and munitions of war, which
the country could furnish.

Why issue bonds to obtain money, when the Government was
the only power which could create it ? Why should the Govera-
ment lease out to private individuals or to soulless corporations,
at snch exorbitant rates, its strongest and most essential power?
Was it, that it might show its humility, by prostrating itself at
the feet of the monster power it had created. Who "w;as bene-
fitted by this pusillanimous governmental conduct — the creator or
creature ?

Oh, yes I but then the Government was in great straits. It
was obliged to obtain some articles and some munitions of war
from foreign countries, and our money would not go there !
What then was to be done ? Exchange articles or commodities,
when that failed, run in debt, and pay when we got the com-
modities with which to pay. Is not that what we did ? Did we not
obtain gold from the capitalists, and purcliased the articles we
wanted with gold ? Not to any considerable extent. How could
the capitalist of this or foreign countries have furnished the gold ?
The gold here has not at any one time much exceeded three
hundred millions, and the gold and silver of the world does not
much exceed, four or five billions, and our expenditures amounts
in round numbers to some seven billions. How then could
capitalists, taking into account the coin required elsewhere, have
supplied the demand ? It was not the gold then which capitalists
furnished that enabled the Government to carry on the war, but
it was merely staunch labor men, and the products of their
industry.



67

But, did we not sell our bonds in Europe ? Certainly, and at
thirty and forty cents on the dollar, it is said ; at an enormous
discount at least. Or, in other words, we through our bonds,
sold them our commodities, at forty cents on the dollar, and
purchased theirs at one hundred cents, and paid them, or are to
pay them, six per cent, per annum, gold interest, for their
gracious condescension in consentmg to take our commodities at
forty, and giving them in return one hundred. This is financier-
ing, and the aid it furnished the nation.

What rendered such a terrible sacrifice necessary? A false
monetary system, and a false business system based upon that
money. Why should it be continued ? What public good, or
lawful private interest can be subserved by its continuance ?
None whatever. How is it sustained ? There can be but one
truthful answer given : It is because financiers demand it. These,
through the politicians, and the political and commercial press,
control public opinion, and by the vilest sophistry and lies, cover
up the wrongs and robberies thus committed. Every intelligent
and right minded man who examines the subject for himself, with
any considerable degree of care, can easily perceive that this
whole financial system is rotten from top to bottom. There is
no soundness in it. It is useless to attempt to renovate it. Its
origin in this country, and every other, is a brazen faced usurpa-
tion of its sovereign power, and its longer continuance would be
a solemn pi-otest against the intelligence and integrity of the
nation. The blindfold power of custom, and the inexhaustible
resources of a new country may palliate the indifierence of the
past, but it can never be an apology for the continuance of this
hateful, and unjust svstem.



CHAPTER IV.



A BILL FOR AN ACT

To ESTABLISH A UkIFOEM CuKBENCT, PbOVIDB FOB THE

Management and Liquidation of the National Debt

AND foe OTHEE PuEPOSES.

Beit enacted, dbc, That the Secretary of the Treasury from
the time this act shaU tare effect, is hereby authorized and
required to issue Treasury certificates not bearing interest, in
denominations of one, two, three, five, ten, twenty, fifty,^ one .
hundred, five hundred, and one thousand dollars j substantially,
in the following form, signed by the Register of the Treasury,
and by the Treasurer of the United States :



Twenty Dollars— Twenty Pollars- Twenty Dollars— Twenty Dollars— Twenty Dollars.

I 20 ""'"" '\..... 20 t

J TWEIVTY I>OLL^^R^S 2



O :S Lawful Money of the Vnited States ]1

O

Was?dngton, ^8

I- Countersigned by O

rj ^Register of the Treasury. r

^ treasurer. ^

H (A

T>venty Dollars— Twenty Dollars— Twenty Dollars— Twenty Dollars— Twenty Dollars.



Each of which certificates in addition to the above form, shall
have their respective denominations of value printed on the
margin, and appropriate vignettes on the face thereof, and such
other numbers, marks, devices, and colors, as shall be best for
the prevention of over issue, forging, or counterfeiting, and on
tlie back thereof shall be printed the words : " Legal tender
money certificate under Act of— (here inserting the date of this
act) " — which certificate shall be received in payment, and shall
be a legal tender in discharge of all debts, and demands now



59

due, or which shall hereafter become due to, or payable by tlic
United States, or to, or by any person or persons, corporation
or corporations in the United States, except when the law under
which the evidence of indebtedness of the United States arose,
expressly requires or provides that the same shall be paid in
coin.

Sec. 2. The Secretary of the Treasury is hereby authorized
and required to issue bonds, signed in like manner as are the
certificates mentioned in the first section of this act, and bearing
date, on either the first day of January, April, July, or October
of the year of their issue, in sums, or denominations not less than
fifty dollars, nor more than ten thousand dollars, payable twenty
years from the date thereof, each such bond other than those of
fifty dollars, shall be for even hundred or hundreds of dollars,
and each bond shall also bear interest at the rate of three per
centum per annum, payable semi-annually, in certificates as per
coupon thereto annexed. All of which bonds shall at any time
be convertible at par, into the certificates mentioned in the first
section of this act, and any holder of such bond, or bonds, may
at any time so convert the same, as well before as after the lapse
of five years from the date of such bond or bonds, the coupons
being detached to their next day for the payment of interest.
Lut all such bonds after the lapse of such five years may at any
time be paid at par, by the United States with the aforesaid
niuiiey, treasury-certificates, or other similar lawful money of the
United States.

Sec. 3. The Secretary of the Treasury, is hereby required to
pay all outstanding bonds or other obligations of the United
States created since the first of July A. D. 1861, where the same
shall become due and payable at the pleasure of the United
States, in said treasury certificates, except as herein before
excepted, or to give in exchange therefor if required by the
owner, the aforesaid ;ind hereby created bond or obligation of
the Uuited States, and if there shall not be raised coin suflicient
to pay off the coin indebtedness of the United States, under
excise and other laws now in force, then the Secretary of the
Treasury is hereby authorized and required, to purchase with
Treasury certificates, or with interest bearing bonds hereby
created, by sealed bids, or otherwise, as may be most advan-
tageous to the public interest, the coin necessary to pay olF all
the coin-interest, and principal bonds of the United States



CI



60

..eated under fonner laws, and the Secretary of the Treasury ia
hereby du-ected to give notice by publication in two newspapers,!
published in Wasliington city, to the holders of any such out
standin.' bonds or other obligations of the United States, t'
preseut°the same at the Treasury-Department for such paymei
or exchange within ninety days from the date of such notice, (
at the tinfe the same may hereafter become due and payable, oj
redeemable at the pleasure of the Government, and the interesj
shall cease to accrue on all such bonds and other obligations oj
the United States not presented for such payment, or exchani
within the time before mentioned, or from the time any sucl
bond or obligation shall thereafter become due and payable,
redeemable at the pleasure of the Government.

Sec. 4. That the sixth and seventh sections of the ac^
*' entitled an act to authorize the issue of the United States note^
and for the redemption or funding thereof, and for funding thj
floating debt of the United States," approved February 25tli
A. D. 1862, as far as the same are applicable, shall apply to th|
Treasury certificates and interest bearing bonds hereby authorize^
to be issued, in like manner and effect as if the said sixth an<
seventh sections were herein incorporated, and the provisions anfl
penalties of the sixth and seventh sections shall extend an«
apply to all persons who shall imitate, counterfeit, make, or s«


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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 6 of 19)