194 



CONGRESS, UNITED STATES. 



large volume of currency, and to the wastes 

 of the war, is contradicted by our experience, 

 and by the parallel experience of England's 

 twenty years of Continental war and irredeem- 

 able paper money. British industry was great- 

 ly wasted by that protracted war, but the loss 

 was more than made up by the industrial pros- 

 perity which attended her full, stable, but irre- 

 deemable paper currency. It was in that sea- 

 son that she established her manufacturing and 

 commercial supremacy over the world. Every 

 sea was whitened with her commerce ; every 

 market filled with her wares. Napoleon said 

 in his exile at St. Helena, ' Great Britain con- 

 quered me with her spindles' with spindles 

 kept in motion by a prosperity due to the fact 

 that she had during that period of suspension 

 a fuller, better, and more stable currency than 

 any which can be built on the quicksands of 

 gold and silver. 



"So we had, during the rebellion and for 

 some time afterward, a full and satisfactory 

 currency which stimulated industry, and com- 

 pensated to a large extent for the ravages of 

 war. If the distress which now afflicts our 

 country were due to the increased volume of 

 paper money, how is it that during the period 

 of the fullest currency bankruptcies were al- 

 most unknown? How is it that that period, 

 though marked by extremely heavy taxation, 

 was one of comparatively little accumulation 

 of municipal or private debt ? 



" Mr. Speaker, the records of commercial 

 failures in the United States indisputably show 

 that business distress was least when the cur- 

 rency was fullest, and that the contraction of 

 the currency, by funding legal tender interest 

 notes, arrested prosperity and caused an enor- 

 mous increase of bankruptcies throughout the 

 nation. In place of this currency withdrawn 

 was substituted a mountain of debt which 

 toppled over in the panic of 1873. But in the 

 year following the panic those records show, 

 and our recollections attest, that the business 

 of the country revived. The return of pros- 

 perity was stopped by this resumption law, 

 which was an emphatic warning to moneyed 

 men to withdraw or withhold their money 

 from all industrial pursuits, and to hoard it in 

 anticipation of a contraction and shrinkage of 

 values unparalleled in our history. 



"My colleague (Mr. Garfield) attempts to 

 prove that our present disasters are the result 

 of the increase of the currency during the war, 

 by citing the hard times from 1837 to 1842 and 

 from 1857 to 1859 as instances of the evils of 

 redundant currency. Sir, the volume of cur- 

 rency was no larger at those periods than it 

 was in 1860, which has been cited by the gen- 

 tleman as the most solidly prosperous year in 

 our history. Those panics were caused by the 

 fact that the specie reserves of the banks were 

 necessarily small, and that to accommodate the 

 business of the country they issued more paper 

 than they could get coin to redeem with, and 

 therefore specie payments collapsed. To get 



back to redemption, the banks were compelled 

 by their charters to do just what the resump- 

 tion law now compels the Treasury and the 

 national banks to do, that is, contract their 

 paper to the little measure compatible with 

 coin redemption. That contraction, and that 

 alone, caused the business distress which char- 

 acterized the years following those panics. 



" I think it safe to say that the combined 

 effect of withdrawal of over seventy-five mil- 

 lions of the paper currency under the resump- 

 tion law, and the hoarding caused by the 

 threat of resumption, have together reduced 

 its effective volume at least one third, result- 

 ing in an average fall of values in like propor- 

 tion. 



" Now, Mr. Speaker, what is the extent of 

 injury thus inflicted? How have tax-payers 

 suffered ? We pay more taxes each year than 

 the aggregate volume of our currency seven 

 hundred and fifty millions for the support of 

 national, State, and local governments. That 

 is, a tax of $17.50 per head for every man, wo- 

 man, and child in the United States ah enor- 

 mous burden, far surpassing any borne by any 

 people on earth. The British pay $11.09 per 

 head; the French, $11.41; the Germans, $9.24; 

 the Austrians, $7.22. This burden is insup- 

 portable, unless industries prosper. The re- 

 sumption law has broken down industries and 

 reduced one third the average values of land, 

 labor, and products, by the sale of which alone 

 taxes are paid, and in effect has thus increased 

 the tax burden 50 per cent. The burden has 

 thus been made, in heavily taxed communities, 

 absolutely insupportable. Several great States, 

 and many counties and cities, have already 

 sought relief in repudiation. Continue that 

 process of reduction of values, bring them 

 down much more, as will inevitably be done 

 if this law be not repealed, and one half of the 

 corporate and municipal debts in the United 

 States will be repudiated. The greed of the 

 money power, in thus seeking to enhance so 

 enormously the value of the dollar, is only 

 equaled by its arrogant and dogged stupidity. 



" Consider, Mr. Speaker, the wrong done to 

 individual debtors by this contrived shrinkage 

 of values. The aggregate of private debts in 

 the United States, including rail way mortgages, 

 is probably not less than seven and one half 

 billions of dollars, or three and one half times 

 the sum of our national debt. They are owed 

 generally by the young, energetic, driving bus- 

 iness men of the country, who are seeking to 

 rise from poverty to competence, or from com- 

 petence to wealth. They comprise two thirds 

 of the merchants, manufacturers, and exchan- 

 gers of values, and give employment to two 

 thirds of the wagemen of the country. This 

 law breaks down their business, strips them 

 of their property, and casts out of employment 

 millions of laborers dependent on them. 



" Above all, Mr. Speaker, consider the effect 

 of the shrinkage of values on wage-laborers 

 and their families; on the millions who are 



