The result of such a system would be:

First to redeem and destroy the present greenbacks, and thus silence the complaint that government does not keep faith in the matter of their redemption; and also to reduce the interest on our national debt to about 3 per cent. Suppose the nation thus issues (lends) $1,200,000,000 of currency, then it will receive over $40,000,000 interest. The annual interest on our debt is now, in round numbers, $100,000,000. Subtract $40,000,000 from this and it leaves us to pay $60,000,000 annually, which is less than 4 per cent. on the whole debt. Twelve hundred millions of currency would be no extravagant estimate. We have more than this amount of what is really currency now, since bills of exchange and checks are really currency in their nature and effects as much as greenbacks are.

The bank loans are, in round numbers, $1,000,000,000. Greenbacks and national bank currency are about $800,000,000-$1,800,000,000 in all.

Under my plan we should have fewer checks and bills of exchange and more greenbacks. But if we had these $1,200,000,000 of greenbacks, and besides the same amount of bills and checks as now, it would be no ill and no wonder. France, an old rich nation, thoroughly developed, has now twice the amount of national currency per head that we have. A new and undeveloped nation like ourselves ought to have twice the amount per head that France has. Hence if our greenbacks were trebled it would be well.

For every dollar of them issued there would be a dollar's value deposited with or pledged to the nation.

Do you say, we should be flooded with paper? I ask who would keep it unless it was worth to him more than 4 per cent.? The moment it ceased to do him that good he would exchange for bonds. Do

you say this power to increase the currency is too dangerous to be trusted to the business men of the country? I ask, in reply, is it any safer to trust it, as it is trusted now, to bank directors? A hundred men in New York can contract or inflate at pleasure. The New York city banks alone increased the currency about 3,000,000 ($2,957,200) in one month, September, 1874! I object to trusting this great power to capitalists and money dealers exclusively. I prefer to associate the traders and manufacturers of the nation in that partnership. They surely know how much money they need better than any guardians can tell them. That is democratic doctrine.

Bonamy Price says:

"How many hats are wanted in the nation? Count the heads. Hatters do not make hats on the principle of ten apiece. How many ships are wanted between England and America? Count the passengers. How many pairs of shoes? Count the pairs of feet. It is just so with bank-notes; more will not circulate than are wanted."

Are banks any more competent to count the heads, the passengers or the feet, than the men who own the heads and the feet and are the passengers?

Over the well-known and deservedly trusted initials of J. S. R., we read in J. M. Forbes' Financial Record for June, 1874: "If money is to be the real medium of exchange and measure of value, you can no more determine by legislation how much money a community needs, or can have, than how many horses, or coaches, or cars, or railroads, or yard-sticks. Whoever wants it will, of course, have it, if he can afford to pay for it,-otherwise he must do without it."

Good sound democratic doctrine that-from a bullionist, too. Who can settle about horses, coaches, cars and yard-sticks better than the makers and users of them?

There is a curious oversight in this cry of inflation. We forget that the nation doubles its population in thirty years; that it adds, therefore, something like a million to its population annually. Of course the sufficient currency of 1870 must be too small for 1876; yet because we have more currency now than in 1860, men hold up hands of horror and cry "Inflation." What mother ever tries to force on a boy of twelve years the jacket made for him when he was six? If he should resist the cramping and demand ampler measures, would there be any reason for his brothers and sisters, and aunts, to clamor him down with the cry of "Inflation?"

Do you say prices would rise? Agreed. Not in proportion, however, to the loans; that is a fallacy which Tooke's History of Prices and Gibbons' Table of Prices disprove. Wages would rise; so would raw products. All manufactured articles would finally fall.

As to this matter of prices and currency, every one knows that the price of an article here is fixed by its price in the central markets of the world.—in Liverpool and London. If flour is cheaper in

Liverpool than in New York, we import it till prices become equal. If flour is dearer in Liverpool than in New York, we export it until prices grow equal. The same rule applies to iron, coal, wool, gold. Of course we put tariffs out of the question. I am speaking of the fundamental laws of trade. Tariffs are artificial arrangements. Let it be remembered, then, that the price in Liverpool fixes our price, and that the price in Liverpool is fixed by the state of the world. Now look at the effect of currency. Did all the assignats France issued affect the price of a hat in London? Did all the paper the confederacy wasted in printing money affect the price of a hat in New York? Of course not. Does our currency now affect the price of flour in Liverpool? Only in a very remote degree. And as Liverpool prices fix ours, our currency can have but little permanent effect on real prices.

To show how little our note currency has to do with prices (the price of gold primarily and other prices in consequence), look at Carey's "Letters to Secretary Bristow," pp. 5, 6, 7, 8.

The currency, however, was then (during the war), as we are now constantly assured, greatly depreciated, gold having commanded heavy premiums, as certainly had been the case. How little, nevertheless, had been the connection between the supply of circulating notes and those premiums it is proposed now to show, as follows:

At the close of 1862 the Government circulation amounted to little less than $300,000,000. As yet the state bank circulation remained undisturbed; and to obtain the actual quantity of circulating notes, it is needed now to add to the above the sum of $180,000,000, giving a total of $480,000,000. We have here a prodigious and most rapid increase, and yet the gold premium had scarcely passed beyond 33.

Two months later, in February, 1863, it stood at 71, with scarcely any perceptible increase in the circulating modium. In July the greenbacks had largely increased, their amount having reached $400,000,000, the premium meanwhile falling to 24. At the close of that year the legal-tenders in circulation had reached $500,000,000, exhibiting an increase of $200,000,000, attended with a decline of premium to the extent of 20 per cent.; the February premium of 71 having been replaced by the December one of 51.

The following year, 1864, exhibits in June an emission of com

pound interest legal-tender notes attended with a rise in the price of gold from 190 in May to 257 in August, and a decline to 218 in December.

Five months later, in May, the premium had fallen to 28, and this without even the slightest reduction in the quantity of circulating notes in use. In the following October, although the quantity of notes on hand, and therefore out of circulation, had become, as then stated by the comptroller of the currency, very large, the premium had risen to 46. In view of all these facts, there is, as I conceive, no possibility of exhibiting any necessary connection between the price of gold and the circulating note.

As difficult would it be to exhibit any such connection with the prices of commodities of home production, all changes in these latter having resulted from circumstances wholly apart from the supply of notes. Cotton and woolen goods were high, for the reason that a cotton and wool famine had been brought about. Labor was high because of the rapid extension of manufactures consequent upon the adoption of a protective policy, and upon the demands of the government for service in the field. Meat of every kind was higher because of the vast demand caused by millions of men in arms. Horses were higher because of army demands, and so was it with hundreds of other commodities that could be named. Real estate, however, remained unaffected; land in Pennsylvania, and houses in Philadelphia, having been purchased as cheaply as could have been the case before the greenback idea had first been started.

From that day (1865) to the present, there has been an incessant war upon the money of the many, the circulating note, leaving wholly out of view the action of money known by the name of "deposits," by means of which the few are enabled to profit at the expense of the many who need to live by exercise of their physical and mental powers. Fierce as has been the war, so slight has been its effect, that at the date of the crisis in September of last year, the circulating notes in use, with gold at 15, were greater in amount than they had been in 1864 with gold at 250, the total having been $759,000,000. Making from this, deductions similar to those made by the comptroller in 1865, the net amount may be taken at $600,000,000, or about $13 dollars per head, being but $1.51 in excess of that of 1862.

Second-The second result of this system would be, that neither

the Bank of England nor any ring there or here could disturb our currency by a corner in gold or greenbacks. We should be beyond such interference.

Third-In time, capitalists will invest in such bonds, since, in conformity to their present theories, these bonds will at last be paid in gold.

Fourth-We develop our new country by having money abundant at 4 per cent. interest, and can thus compete with any nation without a protective tariff.

Why cannot we now compete with Scotland in ship-building, or with the Welch in making rails? Not because of our rate of wages or our high tariff. These are not the only causes. Thomas Brassey, the largest employer of labor, perhaps, in this century, proves (see his life) that it is cheaper to build railways in Asia and Hungary, by carrying there English workmen, at fifty cents a day, than by employing natives on the spot at only ten cents a day. It is not the rate of wages alone that cripples our manufacturers and our western development. It is because our dead capital-lands, buildings and machinery-is worth here 10 and 12 per cent. Abroad it is worth on an average 4 per cent. and we work at a constant disadvantage of from 6 to 7 per cent. year by year.

It is not England's cheap labor that enables her to undersell us. It is her cheap machinery begotten of cheap money.

In Holland since 1790 interest has been from 2 to 5 per cent. Four thousand million of British consols give 3 or 34 per cent. The Bank of England divides less than 4 per cent. Four or at most five per cent. may be fairly called the common interest in England. Bage

says: "Interest in England is not 5 per cent. on the average." If the nation lent money at 4 per cent. every man who owned a bond or any improved land could get it at that rate; others would obtain it at second hand of capitalists, who, taking it of government, would let it out at an advance. But competition would keep that advance small. Where there was no extra risk money could be always had for less than 6 per cent. or even five probably.

Give our eastern manufacturers and our western landholders money at 4 or 5 per cent., and we can then defy the competition of the world. Keep your revenue tariff to pay the debt. Abolish its protective element at once. I waive entirely, so far as our home currency is concerned, all abortive attempts to keep a gold basis.