Thirty Years' View (Vol. II of 2)

I have some tabular statements on hand, Mr. President, made at the Treasury, on my motion, and which show our specie acquisitions during the time that I have sat in this chair: I say, sat in this chair, for I always sit in the same place. I never change my position, and therefore never have to find it or define it. These tables show our imports of gold and silver during this time – a period of twenty-one years – to have been on the custom-house books, 182 millions of dollars: making an allowance for the amounts brought by passengers, and not entered on the books, and the total importation cannot be less than 200 millions. The coinage at our Mint during the same period, is 66 millions of dollars. The product of our gold mines during that period has been several millions; and many millions of gold have been dragged from their hiding places and restored to circulation by the gold bill of 1834. Putting all together, and our specie acquisitions must have amounted to 220 or 230 millions of dollars in these twenty-one years; being at the average rate of ten or eleven millions per annum.

Not specie enough in the world to do the business of the country! What an insane idea! Do people who talk in that way know any thing about the quantity of specie that there is in the world, or even in Europe and America, and the amount that different nations, according to their pursuits, can employ in their business? If they do not, let them listen to what Gallatin and Gouge say upon the subject, and let them learn something which a man should know before he ventures an opinion upon currency. Mr. Gallatin, in 1831, thus speaks of the quantity of gold and silver in Europe and America:

"The total amount of gold and silver produced by the mines of America, to the year 1803, inclusively, and remaining there or exported to Europe, has been estimated by Humboldt at about five thousand six hundred millions of dollars; and the product of the years 1804-1830, may be estimated at seven hundred and fifty millions. If to this we add one hundred millions, the nearly ascertained product, to this time, of the mines of Siberia, about four hundred and fifty millions for the African gold dust, and for the product of the mines of Europe (which yielded about three millions a year, in the beginning of this century), from the discovery of America to this day, and three hundred millions for the amount existing in Europe prior to the discovery of America, we find a total not widely differing from the fact, of seven thousand two hundred millions of dollars. It is much more difficult to ascertain the amount which now remains in Europe and America together. The loss by friction and accidents might be estimated, and researches made respecting the total amount which has been exported to countries beyond the Cape of Good Hope; but that which has been actually consumed in gilding, plated ware, and other manufactures of the same character, cannot be correctly ascertained. From the imperfect data within our reach, it may, we think, be affirmed, that the amount still existing in Europe and America certainly exceeds four thousand, and most probably falls short of five thousand millions of dollars. Of the medium, or four thousand five hundred millions, which we have assumed, it appears that from one-third to two-fifths is used as currency, and that the residue consists of plate, jewels, and other manufactured articles. It is known, that of the gross amount of seven thousand two hundred millions of dollars, about eighteen hundred millions, or one-fourth of the whole in value, and one-forty-eighth in weight, consisted of gold. Of the four thousand five hundred millions, the presumed remaining amount in gold and silver, the proportion of gold is probably greater, on account of the exportation to India and China having been exclusively in silver, and of the greater care in preventing every possible waste in an article so valuable as gold."

Upon this statement, Mr. Gouge, in his Journal of Banking, makes the following remarks:

"We begin to-day with Mr. Gallatin's estimate of the quantity of gold and silver in Europe and America. In a work published by him in 1831, entitled 'Considerations on the Currency and Banking system of the United States,' he estimates the amount of precious metals in these two quarters of the world at between four thousand and five thousand million dollars. This, it will be recollected, was ten years ago. The amount has since been considerably increased, as the mines have annually produced millions, and the demand for the China trade has been greatly diminished.

"Taking the medium, however, of the two sums stated by Mr. Gallatin – four thousand five hundred million dollars – and supposing the population of Europe and America to be two hundred and seventy-seven millions, it will amount to sixteen dollars and upwards for every man, woman, and child, on the two continents. The same gentleman estimates the whole amount of currency in the United States in 1829, paper and specie together at only six dollars a head.

"It is not too much to say, that if the natural laws of supply and demand had not been interfered with, the United States would have, in proportion to population, four, five, six, seven, yea, eight times as much gold and silver as many of the countries of Europe. Take it at only the double of the average for the population of the two continents, and it will amount to thirty-two dollars a head, or to five hundred and fourteen millions. This would give us one-ninth part of the stock of gold and silver of Europe and America, while our population is but one-sixteenth: but for the reasons already stated, under a natural order of things, we should have, man for man, a much larger portion of the precious metals, than falls to the lot of most countries of Europe.

"Suppose, however, we had but the average of sixteen dollars a head. This would amount to two hundred and fifty-seven millions.

"On two points do people (that is, some people) capitally err. First, in regard to the quantity of gold and silver in the world: this is much greater than they imagine it to be. Next, in regard to the amount of money required for commercial purposes: this is much smaller than they suppose it to be. Under a sound money, sound credit, and sound banking system, ten dollars a head would probably be amply sufficient in the United States."

The points on which the statesman's attention should be fixed in these statements are: 1. The quantity of gold and silver in Europe and America, to wit, $4,500,000,000. 2. Our fair proportion of that quantity, to wit, $257,000,000, or $16 per head. 3. Our inability to use more than $10 a head. 4. The actual amount of our whole currency, paper and specie, in 1830 (when the Bank of the United States was in all its glory), and which was only $6 a head. 5. The ease with which the United States can supply itself with its full proportion of the whole quantity if it pleased, and have $16 per head (if it could use it, which it cannot) for every human being in the Union.

These are the facts which demand our attention, and it is only at a single point that I now propose to illustrate, or to enforce them; and that is, as to the quantity of money per head which any nation can use. This differs among different nations according to their pursuits, the commercial and manufacturing people requiring most, because their payments are daily or weekly for every thing they use: food, raiment, labor and raw materials. With agricultural people it is less, because they produce most of what they consume, and their large payments are made annually from the proceeds of the crops. Thus, England and France (both highly manufacturing and commercial) are ascertained to employ fourteen dollars per head (specie and paper combined) for their whole population: Russia, an agricultural country, is ascertained to employ only four dollars per head; and the United States, which is chiefly agricultural, but with some considerable admixture of commerce and manufactures, ten dollars are believed to be the maximum which they could employ. In this opinion I concur. I think ten dollars per head, an ample average circulation for the Union; and it is four dollars more than we had in 1830, when the Bank of the United States was at the zenith of its glory. The manufacturing and commercial districts might require more – all the agricultural States less; – and perhaps an agricultural State without a commercial town, or manufactures, like Mississippi, could not employ five dollars per head. Here then are the results: Our proportion of the gold and silver in Europe and America is two hundred and fifty-seven millions of dollars: we had but twenty millions in 1830: we have ninety millions now; and would require but eighty millions more (one hundred and seventy millions in the whole) in the present state of our population, slaves included (for their labor is to be represented by money and themselves supported), to furnish as much currency, and that in gold and silver, as the country could possibly use; consequently sustaining the prices of labor and property at their maximum amount. Of that sum, we now have about the one-half in the country, to wit, ninety millions; making five dollars per head; and as that sum was gained in seven years of Jacksonian policy, it follows of course, that another seven years of the same policy, would give us the maximum supply that we could use of the precious metals; and that gold, silver, and the commercial bill of exchange, could then constitute the safe, solid, constitutional, moral, and never-failing currency of the Union.

The facility with which any industrious country can supply itself with a hard-money currency – can lift itself out of the mud and mire of depreciated paper, and mount the high and clean road of gold and silver; the ease with which any industrious people can do this, has been sufficiently proved in our own country, and in many others. We saw it in the ease with which the Jackson policy gained us ninety millions of dollars in seven years. We saw it at the close of the Revolution, when the paper money sunk to nothing, ceased to circulate, and specie re-appeared, as by magic. I have asked the venerable Mr. Macon how long it was after paper stopped, before specie re-appeared at that period of our history? his answer was: No time at all. As soon as one stopped, the other came. We have seen it in England at the end of the long bank suspension, which terminated in 1823. Parliament allowed the bank four years to prepare for resumption: at the end of two years – half the time – she reported herself ready – having in that short space accumulated a mass of twenty millions sterling (one hundred millions of dollars) in gold; and, above all, we have seen it in France, where the great Emperor restored the currency in the short space of six years, from the lowest degree of debasement to the highest point of brilliancy. On becoming First Consul, in 1800, he found nothing but depreciated assignats in the county: – in six years his immortal campaigns – Austerlitz, Jena, Friedland – all the expenses of his imperial court, surpassing in splendor that of the Romans, and rivalling the almost fabulous magnificence of the Caliphs of Bagdad – all his internal improvements – all his docks, forts, and ships – all the commerce of his forty millions of subjects – all these were carried on by gold and silver alone; and from having the basest currency in the world, France, in six years, had near the best; and still retains it. These instances show how easy it is for any country that pleases to supply itself with an ample currency of gold and silver – how easy it will be for us to complete our supplies – that in six or seven years we could saturate the land with specie! and yet we have a formal cabinet proposition to set up a manufactory of paper money!

The senator from Mississippi [Mr. Walker] who sits on my right, has just visited the island of Cuba, and has told us what he has seen there – a pure metallic currency of gold – twelve millions of dollars of it to a population of one million of souls, half slaves – not a particle of paper money – prices of labor and property higher than in the United States – industry active – commerce flourishing: a foreign trade of twenty-four millions of dollars, which, compared to population and territory, is so much greater than ours that it would require ours to be four hundred and twenty-five millions to be equal to it! This is what the senator from Mississippi tells us that he has seen; and would to God that we had all seen it. Would to God that the whole American Congress had seen it. Devoutly do I wish that it was the custom now, as in ancient times, for legislators to examine the institutions of older countries before they altered those of their own country. The Solons and Lycurguses of antiquity would visit Egypt, and Crete, and other renowned places in the East, before they would touch the laws of Sparta or Athens; in like manner I should rejoice to see our legislators visit the hard money countries – Holland, France, Cuba – before they went further with paper money schemes in our own country. The cabinet, I think, should be actually put upon such a voyage. After what they have done, I think they should be shipped on a visit to the lands of hard money. And although it might seem strange, under our form of government, thus to travel our President and cabinet, yet I must be permitted to say that I can find constitutional authority for doing so, just as soon as they can find constitutional authority for sending such a scheme of finance and currency as they have spread before us.

Holland and Cuba have the best currencies in the world: it is gold and the commercial bill of exchange, with small silver for change, and not a particle of bank paper. France has the next best: it is gold, with the commercial bill of exchange, much silver, and not a bank note below five hundred francs (say one hundred dollars). And here let me do justice to the wisdom and firmness of the present king of the French. The Bank of France lately resolved to reduce the minimum size of its notes to two hundred francs (say forty dollars). The king gave them notice that if they did it, the government would consider it an injury to the currency, and would take steps to correct the movement. The Bank rescinded its resolution; and Louis Philippe, in that single act (to say nothing of others) showed himself to be a patriot king, worthy of every good man's praise, and of every legislator's imitation. The United States have the basest currency in the world: it is paper, down to cents; and that paper supplied by irresponsible corporations, which exercise the privilege of paying, or not, just as it suits their interest or politics. We have the basest currency upon the face of the earth; but it will not remain so. Reform is at hand; probably from the mild operation of law; if not, certainly from the strong arm of ruin. God has prescribed morality, law, order, government, for the conduct of human affairs; and he will not permit these to be too long outraged and trampled under foot. The day of vindicating the outraged law and order of our country, is at hand; and its dawn is now visible. The excess of bank enormity will cure itself under the decrees of Providence; and the cure will be more complete and perfect, than any that could come from the hands of man.

It may seem paradoxical, but it is true, that there is no abundant currency, low interest, and facility of loans, except in hard money countries: paper makes scarcity, high interest, usury, extortion, and difficulty of borrowing. Ignorance supposes that to make money plenty, you must have paper: this is pure nonsense. Paper drives away all specie, and then dies itself for want of specie; and leaves the country penniless until it can recruit.

The Roman historians, Mr. President, inform us of a strange species of madness which afflicted the soldiers of Mark Antony on their retreat from the Parthian war. Pressed by hunger they ate of unknown roots and herbs which they found along the base of the Armenian mountains, and among the rest, of one which had the effect of depriving the unfortunate man of memory and judgment. Those who ate of this root forgot that they were Romans – that they had arms – a general – a camp, and their lives, to defend. And wholly possessed of a single idea, which became fixed, they neglected all their duties and went about turning over all the stones they could find, under the firm conviction that there was a great treasure under it which would make them rich and happy. Nothing could be more deplorable, say the historians, than to see these heroic veterans, the pride of a thousand fields, wholly given up to this visionary pursuit, their bodies prone to the earth, day after day, and turning over stones in search of this treasure, until death from famine, or the Parthian arrow, put an end at once to their folly and their misery. Such is the account which historians give us of this strange madness amongst Antony's soldiers; and it does seem to me that something like it has happened to a great number of our Americans, and even to our cabinet council – that they have forgotten that we have such a thing as a constitution – that there are such things as gold and silver – that there are limitations upon government power – and that man is to get his living by toil and labor, and the sweat of his brow, and not by government contrivances; that they have forgot all this, and have become possessed of a fixed idea, that paper money is the summum bonum of human life; that lamp-black and rags, perfumed with the odor of nationality, is a treasure which is to make everybody rich and happy; and, thereupon incontinently pursue this visionary treasure – this figment of the brain – this disease of the mind. Possessed of this idea, they direct all their thoughts to the erection of a national institution – no matter what – to strike paper money, and circulate it upon the faith of the credit and revenues of the Union: and no argument, no reason, no experience of our own, or of other nations, can have the least effect in dislodging that fixed and sovereign conception. To this we are indebted for the cabinet plan of the federal exchequer and its appurtenances, which has been sent down to us. To this we are indebted for the crowds who look for relief from the government, instead of looking for it in their own labor, their own industry, and their own economy. To this we are indebted for all the paper bubbles and projects which are daily presented to the public mind: and how it all is to end, is yet in the womb of time; though I greatly suspect that the catastrophe of the federal exchequer and its appurtenances will do much towards curing the delusion and turning the public mind from the vain pursuit of visionary government remedies, to the solid relief of hard money, hard work, and instant compulsion of bank resumption.

The proposition which has been made by our President and cabinet, to commence a national issue of paper money, has had a very natural effect upon the public mind, that of making people believe that the old continental bills are to be revived, and restored to circulation by the federal government. This belief, so naturally growing out of the cabinet movement, has taken very wide and general root in the public mind; and my position in the Senate and connection with the currency questions, have made me the centre of many communications on the point. Daily I receive applications for my opinion, as to the revival of this long deceased and venerable currency. The very little boys at the school have begged my little boy to ask their father about it, and let them know, that they may hunt up the one hundred dollar bills which their mothers had given them for thumb papers, and which they had thrown by on account of their black and greasy looks. I receive letters from all parts of the Union, bringing specimens of these venerable relics, and demanding my opinion of the probability of their resuscitation. These letters contain various propositions – some of despair – some of hope – some of generous patriotism – and all evidently sincere. Some desire me to exhibit the bundle they enclose to the Senate, to show how the holders have been cheated by paper money; some want them paid; and if the government cannot pay at present, they wish them funded, and converted into a national stock, as part of the new national debt. Some wish me to look at them, on my own account; and from this sample, to derive new hatred to paper money, and to stand up to the fight with the greater courage, now that the danger of swamping us in lamp-black and rags is becoming so much greater than ever. Others, again, rising above the degeneracy of the times, and still feeling a remnant of that patriotism for which our ancestors were so distinguished, and which led them to make so many sacrifices for their country, and hearing of the distress of the government and its intention to have recourse to an emission of new continental bills, propose at once to furnish it with a supply of the old bills. Of this number is a gentleman whose letter I received last night, and which, being neither confidential in its nature, nor marked so, and being, besides, honorable to the writer, I will, with the leave of the Senate, here read:

"East Weymouth, Massachusetts, January 8, 1842

"Dear Sir: – Within you have a few continentals, or promises to pay in gold or silver, which may now be serviceable to the Treasury, which the whigs have bankrupted in the first year of their reign, and left members without pay for their landlords. They may serve to start the new fiscality upon; and, if they should answer the purpose, and any more are wanted, please let me know, and another batch will come on from your friend and servant,

"Lowell Bicknell.

"Hon. Thomas H. Benton, United States Senate, Washington city."

This is the letter, resumed Mr. B., and these the contents (holding up a bundle of old continentals). This is an assortment of them, beginning at nine dollars, and descending regularly through eight, seven, six, five, four, three, two, one, and the fractional parts of a dollar, down to the one-sixth part of a dollar. I will read the highest and lowest in the bundle, as a sample of the whole. The highest runs thus:

"This bill entitles the bearer to receive nine Spanish milled dollars, or the value thereof in gold or silver, according to the resolves of the Congress held at Philadelphia, the 10th day of May, 1775.

"Signed,

William Craig."

The margins are covered with the names of the States, and with the words continental currency, in glaring capitals, and the Latin motto, Sustine vel abstine (Sustain it, or let it alone). The lowest runs thus:

"One-sixth of a dollar, according to a resolve of Congress passed at Philadelphia, February 17th, 1776.

"Signed,

B. Brannan."

The device on this note is a sun shining through a glass, with the word fugio (I fly) for the motto – a motto sufficiently appropriate, whether emblematic of the fugitive nature of time, or of paper money.

These are a sample of the bills sent me in the letter which I have just read; and now the mind naturally reverts to the patriotic proposition to supply the administration with these old bills instead of putting out a new emission. For myself I incline to the proposition. If the question is once decided in favor of a paper emission, I am decidedly in favor of the old continental currency in preference to any new edition – as much so as I prefer the old Revolutionary whigs to the new whigs of this day. I prefer the old bills; and that for many and cogent reasons. I will enumerate a few of these reasons: – 1. They are ready made to our hand, and will save all the expense and time which the preparations of new bills would require. The expense would probably be no objection with this administration; but, in the present condition of the Treasury, the other consideration, that of time, must have great weight. 2. They cannot be counterfeited. Age protects them from that. The wear and tear of seventy long years cannot be impressed on the face of the counterfeits, cunning as their makers may be. 3. Being limited in quantity, and therefore incapable of contraction or inflation at the will of jobbers in stocks or politics, they will answer better for a measure of values. 4. They are better promises than any that will be made at this day; for they are payable in Spanish milled dollars, which are at a premium of three per cent, in our market over other dollars; and they are payable in gold or silver, disjunctively, so as to give the holder his option of the metals. 5. They are made by better men than will make the bills of the present day – men better known to Europe and America – of higher credit and renown – whose names are connected with the foundation of the republic, and with all the glorious recollections of the revolution. Without offence to any, I can well say that no Congress of the present day can rank with our Revolutionary assemblies who signed the Declaration of Independence with ropes round their necks, staked life, honor, and fortune in a contest where all the chances were against them; and nobly sustained what they had dared to proclaim. We cannot rank with them, nor our paper ever have the credit of theirs. 6. They are of all sizes, and therefore ready for the catastrophe of the immediate flight, dispersion, absconding, and inhumation of all the specie in the country, for which the issue of a government paper would be the instant and imperative signal. Our cabinet plan comes no lower than five dollars, whereby great difficulty in making change at the Treasury would accrue until a supplementary act could be passed, and the small notes and change tickets be prepared. The adoption of the old continental would prevent this balk, as the notes from one to ten dollars inclusive would be ready for all payments which ended in even dollars; and the fractional notes would be ready for all that ended in shillings or sixpences. 7. And, finally, because it is right in itself that we should take up the old continentals before we begin to make new ones. For these, and other reasons, I am bold to declare that if we must have a Congress paper-money, I prefer the paper of the Congress of 1776 to that of 1842.