Page images
PDF
EPUB

against loss. It is impossible that it should be otherwise; for the greatest amount of profit, in the long run, is to be gained under a currency uniform in volume and value. The manner in which this class are often treated shows how completely an irredeemable currency subverts the sense of those using it. Another class, who are real offenders, but who often escape all annoyance and censure, are those who are able to monopolize such large amounts of this money as to control the market on a grand scale, and, by alternately raising and depressing prices, often make a profit equal to the degree of the fluctuation they can cause. A legal-tender currency always tends to flow to the great centres of trade, for the reason that it cannot distribute itself, like gold, or be absorbed in the arts, or retired by the operations of production and trade. It is always upon the market in full volume, its amount bearing no relation to the quantity of merchandise to be moved by it. It is wholly unlike a convertible currency, which is always disappearing, to reappear only to symbolize new creations of merchandise. The latter, as soon as it has served its purpose by reaching for consumption that which it represents, becomes functus officio. Such a currency, consequently, bears an exact relation to that which is to be moved by it. In addition to the monopoly of money which a government currency always serves to create, those who hold it are always able to increase or diminish its purchasing power, by increasing or diminishing its apparent value; that is, the credit of the government issuing it. This credit, therefore, becomes at once the great object of attack by a large and powerful class. So far as they can affect its value, it is the same as if they could, upon the occasion, create the instruments by which is to be measured the extent or quantity of whatever they buy or sell. The credit of all governments, and with it the prices of their securities, is constantly fluctuating; but none so much so as that of governments issuing legal-tender notes, as these are regarded as the last resort of incompetency and exhaustion. The credit of such governments, and with it the standards of value, are in the hands of the rich and unscrupulous; who, as far as its subsistence is concerned, may have a whole community in their power. A legal-tender currency, therefore, in whatever light viewed, is the crowning blunder and injustice of a State. It corrupts the morals; arrays class against class; exposes the unoffending

to the fury of merciless mobs, impelled by a sense of wrong and suffering, the cause of which they cannot understand; creates the most odious of all monopolies, that of money; and saps the very foundation of material prosperity, by reducing all industry and enterprise to the mere hazards of games of chance. It tends directly to reduce society to a condition of barbarism; for the reason that, from the want of an accurate measure of value, almost every act becomes more or less tainted with injustice and fraud.

a measure enor

At the close of 1778, the total amount of notes authorized and issued equalled $101,500,000 of which $6,000,000 were authorized in 1775; $19,000,000, in 1776; $13,000,000, in 1777; and $63,500,000, in 1778. Their value at the close of the last year was reduced to about eight to one of coin. The military operations for the year were on the whole unfavorable. Great distrust and despondency were the natural results. By this time, the most potent enemy with which the nation had to contend was its money. Very little coin was in circulation. Its notes were the common measure of value, mously depreciated, and never two days the same; which no honest man dared trust or use; but which could, at its face, legally discharge debts contracted to be paid in coin. No wonder the anarchy and distress which prevailed, the hand of every man being against his neighbor; or the impotence of Government, and the impossibility of carrying out any plan of operations which the Commander-in-chief might propose. Almost every thing that was undertaken came to nothing, from the lack of money to raise and pay troops, to provide military supplies and means of transportation. In vain did Congress invest Washington with dictatorial powers. He could urge and entreat the States to act; but was as incapable of compelling obedience as was Congress itself. The soldiers, whose pay was at best a pittance, saw that even this was fast losing all its value. The discontent, occasioned as much by the depreciation of what they held as by the non-payment of what was due them, ended, in the winter of 1778-79, in a mutiny in the army stationed at Morristown, which at one time threatened the gravest consequences. These were only averted by the address and influence of Washington. While the army

was unable, for want of means, to achieve any thing worthy of itself, and was filled with discontent bordering upon insubordination, the operations of commerce and trade were almost completely paralyzed. Never was there a more wretched picture than that presented by the United States for the four years beginning with 1776 and ending with 1779. Any one reading this sketch may well wonder that the cause of the patriots did not utterly fail. One reason was the imbecility and incapacity with which it was opposed. With the exception of Lord Cornwallis, there does not appear to have been a single officer high in command in the British army possessing any capacity for military or civil affairs. Another was the vast extent of country to be overrun and occupied, if the rebellion were to be put down. Although the colonists had been most loyal subjects of the crown, such was the injustice with which they were treated, and the sufferings they had endured, that, after the war had been waged a few years, no concession made by the Home Government could ever have brought them back to their former allegiance. They could have been held in subjection only by an armed force in every little community, far beyond the ability of the enemy to maintain. If finally worsted in the field, great numbers would have taken to the forests, from which they would have carried on a guerilla warfare, which would never have allowed him to be weak in force or off his guard. It is well-known that it was the purpose of Washington, had the final result been against him, to have crossed the Alleghanies for a home in the vast solitudes of the Mississippi Valley. Another reason was the independent condition of the people. Nine out of every ten were cultivators of the soil. Nearly all that was consumed by a family was produced by its own labor, so that the interruption of trade and the destruction of the foreign commerce of the country did not, after all, weigh so heavily upon the nation. The accounts that we get of the time come from the cities, the inhabitants of which, chiefly concerned in trade and manufactures, suffered severely. The first effect of the government notes was to create a general inflation in prices and great activity in all business operations, to be soon followed by a corresponding depression and inactivity; which, as their cause was not understood, produced great complaints, without lead

ing to the adoption of any remedy. For the enemy to overrun the country was a mere waste of time and means, unless it could be filled with troops, for which all that England could have put into the field would by no means have sufficed. The Home Government wholly misconceived the nature of the struggle in which it engaged, and the extent of the natural obstacles opposed to its arms, which were more formidable than any which could be opposed by the hand of man.

The financial position becoming daily more and more critical, Congress resolved to reduce the amount of its notes, in order to raise the credit of those outstanding. On the 1st of January, 1779, it passed a resolution calling upon the States to pay in $15,000,000 in notes for the current year, and $6,000,000 a year for the next eighteen years. It also declared, that if any were issued in the year ensuing, they should, in the manner and within the period prescribed for the other notes, be taken in, to be first applied to the payment of interest; next, to that of the principal of the loans outstanding, and made prior to Jan. 1, 1780; and that all not necessary for the above purposes were to be destroyed. It was hoped that such measures would prevent any further decline. All such expedients proved unavailing, for the reason that no one supposed the requisitions would be complied with. The notes could not be got in; and Congress was compelled to make further issues, which it did to the amount of $10,000,000 in the following month. Matters continued to go rapidly from bad to worse. Early in May, 1779, the President of the Council for Pennsylvania and others were admitted upon the floor of Congress, to state the dilemma in which they were placed, and solicit its interposition to avert a popular movement which was apprehended. A meeting of the citizens of Philadelphia was to be held, and violence was feared from an excited and suffering populace. Congress could only issue one of its manifestoes, that the country had been forced into a cruel war, that it had resorted to notes as its only resource, that ultimate success was certain, that all its obligations would be faithfully respected, that the great cause of high prices was the conduct of forestallers and monopolizers, and that these must be looked after and severely punished; all to end, however, with a further issue of notes. The Philadelphia meeting was held, and resolved:

"That, whereas prices of goods and provisions have, within the last six months, risen to an enormous height, far beyond what they ought to be in proportion to the quantity of money; and, whereas the prices of rum, sugar, flour, coffee, and tea have greatly risen within the past week, without any real or apparent cause: and, as it is our determination not to be eaten up by monopolizers and forestallers, therefore we unconditionally insist and demand that the advanced or monopolized price of the present month be instantly taken off, and that prices be immediately reduced to what they were on the first day of May, instant." 1

Committees of safety were at that time almost supreme powers in the land; and one, as a matter of course, was appointed at the meeting referred to, charged with full authority to carry out its objects; to regulate the value of property, of rentals, of labor, and, in fact, of almost every act of society. The people, sensible only of their sufferings, and ignorant of the cause, clamored fiercely for a reduction in the price of food. Congress promised to give ear to their complaints; but constantly aggravated them by new issues of paper, at the same time urging the States to establish tariffs of prices, and denouncing to the severest punishments all who should violate them. In all such measures, it was certain to have the sympathy of the great mass of the people, who still believed that prices could be regulated by law. In illustration, the following extract is given, from a communication which appeared at the time in the "Philadelphia Packet: "—

"I am one who thinks," says the writer, "a limitation of prices is absolutely necessary. I am sure every man must wish it as the only means to get rich. We have all been wrong in our notions of getting rich. It is true we have got money. I have more money than I ever had; but I am poorer than I ever was. I had money enough some time ago to buy a hogshead of sugar. I sold it again, and got a great deal more money for it than what it cost me; yet what I sold it for, when I went to market again, would buy but a tierce.

1 What some of these prices were on the first day of May will be seen by the following statement:

[merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][ocr errors][merged small][ocr errors][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small]
« PreviousContinue »