The most disagreeable labor is ent.i.tled to the highest compensation.

$1.00

Cincinnati, Ohio.

Due to Bearer, EIGHT HOURS' LABOR, In Shoe-making, or a Hundred Pounds of Corn.

William Morton.

No. --, F---- Street.

Time is Wealth.

Of course, to make this money equitable, and its issue, as claimed, "the satisfactory solution of the great problem of labor and capital,"

there must be some presupposed equitable relation between eight hours of shoe-making and a hundred pounds of corn. But one hundred pounds of corn in Illinois are the result of only a quarter as much labor as a hundred pounds in New England; and what comparison is there between eight hours' work of a skilled mechanic and that of a mere cobbler in making shoes? or of the man who performs a disagreeable, slavish piece of work, and of the genius who invents or makes a machine that makes this disagreeable work unnecessary?

E. D. Linton, of Boston, one of Warren's most eminent disciples, improves on Warren's ideas, and proposes that the United States Government should prepare and issue a currency, which should read as follows:

The United States will pay One Dollar to Bearer, on demand, in ---- bushels of Illinois Fall Wheat, at United States No. 1 Store-house, No. 12 River Street, Chicago, Ill.

This note is receivable for all debts due the United States.

And the same inferentially in respect to pigs, coal, shoes, and the services of doctors, lawyers, and cooks. So, then, if the note is not to be on its face a lie, and the promise is to be actually performed on demand, the necessity will be absolute on the part of the Government of the United States to have store-houses for wheat at Chicago, pig-pens at Peoria, coal-mines or depots at Pottsville, and trained professionals ready on call to plead a case, preach a sermon, cure a cold, and cook a dinner; and all of these last must take their pay in pigs if required. But as a pig has one value at Peoria, and another value at almost every other place, the dollar's worth of pig which the United States would pay might be a whole pig in one place, a half in another, and possibly only the snout in another.

[17] Although, to all who have investigated the subject, the evidence is conclusive that an irredeemable fluctuating paper money is always made an agency for taxing with special severity all that cla.s.s of consumers who live on fixed incomes, salaries, and wages, it has, nevertheless, always been a somewhat difficult matter to find ill.u.s.trations of the fact so clear and simple as carry conviction by presentation that it does thus act to the cla.s.ses most interested. With a view of obtaining such an ill.u.s.tration, application was made some months since to an eminent American merchant, whose large and varied experience abundantly qualified him to discuss the subject; and the result of the application may be thus stated:

Q. In buying in gold and selling in currency, what addition do you make to your selling price, in the way of insurance, that the currency received will be sufficient--plus profit, interest, etc.--to replace or buy back the gold represented by the original purchase?

A. We do but very little of that now; hardly enough to speak about.

Q. But still you make insurance against currency fluctuations an item in your business to be regarded to some extent?

A. Why, yes, certainly; it won't do to overlook it entirely.

Q. Well, then, if you have no objections, please tell me what you do allow under existing circ.u.mstances?

A. I have certainly no objections. We buy closely for cash; sell largely for cash, or very short credit; and, within the comparatively narrow limits that currency has fluctuated for the last two or three years, add but little to our selling prices as insurance on that account--say one to two per cent. for cash, or three months' credit; and for a longer credit--if we give it--something additional. During or immediately after the war, when the currency fluctuations were more extensive, frequent, and capricious, the case was very different. Then selling prices had to be watched very closely, and changed very frequently--sometimes daily. My present experience, therefore, is exceptional; and to get the information you want, you must look further. I think I can help you to do this. We buy regularly large quant.i.ties of a foreign product--let us suppose, for ill.u.s.tration, cloth, for the large manufacturers and dealers in ready-made clothing. We buy for gold, and we sell for gold, and do not allow the currency or its fluctuations to enter in any way into these transactions. But how is it with my customers? I allow them some credit; and the amount involved being often very large, I, of course, must know something of the way in which they manage their business. They transform the cloth, purchased with gold, into clothing; and then sell the clothing, in turn, to their customers--jobbers and retailers--all over the country, for currency, on a much longer average credit than they obtain from me for their raw material. As a matter of safety and necessity, these wholesale dealers and manufacturers must add to their selling prices a sufficient percentage to make sure that the currency they are to receive at the end of three, six, or nine months will be sufficient to buy them as much gold as they have paid to me, or as much as will buy them another lot of cloth to meet the further demands of their business and their customers. How much they thus add I can not definitely say. There is no regular rule. Every man doubtless adds all that compet.i.tion will permit; and every circ.u.mstance likely to affect the prospective price of gold is carefully considered. Five per cent., in my opinion, on a credit of three months would be the average minimum; and for a longer time, a larger percentage. If compet.i.tion does not allow any insurance percentage to be added, there is a liability to a loss of capital, which, in the long run, may be most disastrous--a circ.u.mstance that may explain the wreck of many firms, whose managers, on the old-fashioned basis of doing business, would have been successful. The jobbers and the retailers, to whom the wholesale dealers and manufacturers sell, are not so likely to take currency insurance into consideration in fixing their selling prices; but to whatever amount the cost price of their goods has been enhanced by the necessity of insurance against currency fluctuations, on that same amount they estimate and add for interest and profits; the total enhancement of prices falling ultimately on the consumer, who, of necessity, can rarely know the elements of the cost of the article he purchases.

Q. So Mr. Webster, then, in his remark, which has become almost a proverb, that "of all contrivances for cheating the laboring cla.s.ses, none has been more effectual than that which deludes them with paper money," must have been thoroughly cognizant of the nature of such transactions?

A. Most undoubtedly; for such transactions are the inevitable consequence of using as a medium of exchange a variable, irredeemable currency.

The ill.u.s.tration above given, therefore, in the place of being imaginary, is based on the actual condition of business at the present time--January, 1876.

[18] In 1864, a ship was built in New York, at the time when labor and materials, reckoned in currency, had touched their highest prices. In 1870, another ship was built in the same place and on the same model--like the former in every particular. It was expected that, as wages and the cost of materials were less in 1870 than in 1864, the cost of the latter ship would be much less than that of the former; but the result showed that this was not the case.

[19] When the j.a.panese emba.s.sy visited the United States, in 1872, they were seriously advised to create, by some means, a national debt as soon as they returned home, and make use of it as a basis for the creation and issue of currency.

[20] Machiavelli, in his "Discourses on the First Ten Books of Livy,"

book ii., chap, iii., in explaining the great difference in the relative growth of the Roman and Spartan republics, relates that "Lycurgus, the founder of the Spartan republic, believing that nothing could more readily destroy his laws than the admixture of new inhabitants, did every thing possible to deter strangers from flocking thither. Besides denying them intermarriage, citizenship, and all other companionships (conversationi) that bring men together, he ordered that in his republic only leather (non-exportable) money should be used, so as to indispose all strangers to bring merchandise into Sparta, or to exercise any kind of art or industry there, so that the city never could increase in population."

[21] Examination will show that the United States, for one-sixth part of their existence as a federated nation, have been in a state of war; and, for the future, there is no good reason for supposing that the country is to be any more exempt from the vicissitudes of nations than it has been in the past. With irredeemable paper, violation of plighted faith, gold demonetized and banished, in what condition is the nation for maintaining a great national struggle?

[22] In a case often overlooked (Bank vs. Supervisors, 7 Wallace), the United States Supreme Court decided that "United States notes are engagements to pay dollars; and the dollars intended are coined dollars of the United States." Refusal to pay such notes in coin is clearly, therefore, repudiation.

[23] Irving's "Conquest of Granada."

[24] In every cabinet of rare coins in Europe there will be found specimens of what are known as "obsidional" coins, or coins struck in besieged places to supply the place of coined money. These coins appear, in all instances, to have been regarded as obligations sacred in their nature, and their repudiation a high crime against morality and patriotism.

[25] Speech of General B. F. Butler, United States House of Representatives.

[26] Letter of Wendell Phillips to the New York Legal-tender Club, 1875.

[27] Charles Moran, New York Commercial Bulletin, October 5th; 1875.

[28] Opinion of the United States Supreme Court, by Justice Strong.--Wallace, 12, p. 553.

[29] The Indians on the Atrato River (Central America), when first visited by one of the recent inter-ocean-ca.n.a.l exploring parties, were found to be unaccustomed to the use of much, if any, clothing; but after a little intercourse with civilized man, some of the more intelligent of the natives presented themselves with their bodies painted in close imitation of clothes, which they claimed to be superior in every respect to the genuine articles worn by their visitors.

[30] This was what actually happened in Connecticut in 1704 and thereabouts. See "Madame Knight's Journal," quoted in Felt and Bronson's "Histories of New England Currencies."

[31] Whatever may have been the immediate effect of the gold-discoveries in California and Australia, no economist of repute now holds to the opinion that the average purchasing power of gold all the world over is any less than it was in 1849-'50; or, in other words, that any increase in the quant.i.ty of gold since 1849-'50 has resulted in any present depreciation.

[32] This is the American interpretation. The English interpretation of "legal tender" was brought out in a debate in the House of Lords, in June, 1811, when it was shown to mean, in its application to Great Britain, no more than this: that in a suit between creditor and debtor, if a judgment went against the debtor, he was allowed to plead a tender of bank-notes in arrest of execution, but he could not claim that the notes should be forced upon the creditor in discharge of the debt. During the long suspension of specie payments in Great Britain, therefore, bank-notes were never made legal tender in the American sense.

[33] After the Revolutionary war it was considered disgraceful to take advantage of the legal-tender character of the depreciated Continental or State paper money to liquidate debts with it; and the Society of Cincinnati expelled a member for so doing. The State of Rhode Island also, which longer than any of the other States endeavored to maintain by law the legal-tender character and use of such money, was often spoken of in consequence as "Rogue's" in place of "Rhode" Island.

[34] To any who may desire to know how far imagination has been drawn upon for this picture, reference is made to the speech of Hon. O. P. Morton, United States Senate, "Congressional Record,"

vol. ii., part i., Forty-third Congress, First Session, p. 669.

[35] The pertinacity "with which a mind befogged on the subject of money and currency holds on to the delusion that the making and issue of promises to pay, and calling the same money, is equivalent to the creation of wealth; and, vice versa, that the cancellation or withdrawal, by payment, of such promises is the same thing as the destruction of wealth, and also tends to make money--in the sense of capital--scarce, and interest high, finds many amusing ill.u.s.trations, which for educational purposes are better than arguments.

For example, we have, first, the a.s.sumption of a leading Senator of the United States (already referred to, and which, if not on record, would seem incredible) that because an increased supply of horses and hogs made available to a market make horses and hogs cheap, therefore an increased supply of evidences that capital had been borrowed, used, and never paid, would tend to increase the quant.i.ty and rate of interest of loanable capital. A corresponding ill.u.s.tration is also to be found in the case of the member of the Continental Congress mentioned by Pelatiah Webster, who, when the subject of increased taxation for the support of the war was under consideration, indignantly asked "if he was expected to help tax the people, when they could go to the printing-office and get money by the cart-load?"

The experience of the Irish mob also finds an appropriate place under this head, which made a bonfire of all the notes issued by an obnoxious private banker that they could gather, little imagining, as they shouted and capered with wild delight about the fire that consumed them, that, in place of impoverishing, they were really enriching, their enemy.

The following story, also ill.u.s.trative of the same popular fallacy, pa.s.ses current in one of the towns of Eastern Connecticut: During the severe financial panic of 1857, an honest country farmer and deacon, who, by virtue of being a considerable stockholder in one of the local banks, had been placed as a figure-head on its board of directors, was applied to by a farmer friend to help him in procuring from the bank a small loan. Knowing that the times were hard, and money scarce, the deacon, although desirous of obliging his friend, did not at once commit himself, but promised to go to the bank, and make his action contingent upon the state of affairs which he might there find. The two friends, accordingly, went into town the next day (which happened to be the culminating day of the crisis, when every promise to pay issued by any bank was, in the general distrust, gathered up and rushed in for redemption); and, while the applicant for the loan waited outside, the director entered the bank to reconnoitre. Pa.s.sing into the directors' room, and thence behind the counter, he said little, but, keeping his eyes wide open, did not fail to notice the extraordinarily large packages of bills, filling safe and drawers, which, to the annoyance and strain of the bank, had been recently sent in for payment. Seeking no further proof of the financial strength of his inst.i.tution, he returned to the street, and, informing his friend that every thing was all right, the latter next entered, and confidently asked for his discount. To his great surprise, he received the usual polite answer, that "they would be too glad to oblige him, but that, really, they had no money." "Out of money!" said the deacon, when the result of the application was made known to him. "Out of money! How can they lie so, when I have just seen the safe and drawers full of it? As a Christian man, and an officer of the church, I can't conscientiously be a director and stockholder any longer in such an immoral inst.i.tution." And yet, if, on returning home, the good deacon had found in his table-drawer a number of his individual promissory-notes, signed and ready to issue, but not issued, he would not have thought himself any richer by their existence, but, on the contrary, would have felt much more comfortable at such a time to know that the notes were all under double-lock security, or, better, if he saw them vanishing into ashes. And yet, in the case of the bank-notes, he couldn't understand why they were not money, to be used at all times and under all circ.u.mstances!

[36] Between the years 1860 and 1870, the United States doubled the quant.i.ty of currency available for use by its citizens, and yet the rate of interest was as high in the latter year as in the former.

[37] Such were some of the uses finally made of the Continental currency. See Sumner's "History of American Currency," p. 46.