432 
Annual Report of the 
We have never really had one. We have only pretended to have 
one. One dollar in gold to five or seven in paper is no real gold basis. 
We have pretended it was, and as a consequence it has happened in¬ 
evitably that the moment confidence ceased the banks have always 
suspended specie payments. Just at the moment we needed specie 
we could not get it of the banks. It is of no use trying to keep up 
this sham an} r longer. 
English economists may well clamor for gold and silver as the 
sole basis for banking. With them two-thirds of their national 
wealth is floating—only one-third fixed. They can afford to deal, 
in arranging currency, with only floating wealth. They have more 
than enough of it. Here two-thirds of our national wealth is fixed, 
and only one-third floating. That England was not undone by the 
Suez canal, she owes to the amount of her floating capital and her 
prompt way of using it. This is an important distinction in set¬ 
tling the financial policy of a nation. Evidently if we would avail 
ourselves to the full of all our strength we must use fixed property 
—'land, &c.—-to aid our currency and banking methods. Other¬ 
wise we enter the field of competition with our right hands chained. 
Even Bullionist Bowen allows that without irredeemable paper- 
money, England could not have conquered Napoleon; that paper- 
notes fought the battle of Waterloo, kept her working-men em¬ 
ployed, gave them ease under almost incredible taxes, and secured 
to trade unexampled prosperity. Our late war tells the same story. 
Yet there are those who seem never able to learn the lesson. 
As for our international currency we must remember that a debtor 
nation is always the slave of his creditor. Our slavery to Eng¬ 
land is seen in the fear that the Bank of England would swamp 
Mr. Boutwell’s syndicate if he did not conform to the wishes of the 
bank. In consequence of this dependence a debtor nation should 
separate entirely its national currency from its international cur¬ 
rency, in order to save its home-system from foreign interference. 
I propose, therefore, one system of currency for home use, and an¬ 
other, entirely distinct, for use between ourselves and foreign na¬ 
tions. 
We must remember that our coin is worth nothing abroad as 
coin. “Bullion is the ‘cash’ of international trade; paper curren¬ 
cies are of no use there, and coins pass only as they contain more 
or less bullion." Bagehot, p. 44. Our coin is received abroad only 
