The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1896-09-05
MONEY AND PROPERTY
The Great Calhoun Foresaw tho
Danger from Money Manipulators

cred in the United States Senate Maroh
q, 1884, on the Bill to Re-cbarter tLa
National Bank, said w
IAN feel that the currency is delicate
subject, requiring to be touched with tbs
utmost caution; but in order that it NAV he
seen IS well as felt, why it is 50 delicste
why slight touches either in depressing or
elevating it, agitate and conyulse the who'll
community, l viii pause to explain tbe
cause. If We take the aggregate property
of community, that which forms the cur.
rency constitutes in value very small nro
portion of the whole. What this propor
tion Is in our country and other commercial
and trading communities is somewhat nm
certain. speak eonjecturally in fixing It
as one to twenty-five or thirty. though 7
presume that is not far from the truth: and
yet this proportion in our country and other
commercial and trading communities. reop-
lates the value of all the rest, and forms the
medium of circulation by which all its ex-
changes are effected; bearing in this re-
speet, a striking similarity, considering the
diversity of the subjects, to the blood in
the human or animal system
If We turn cur attention to the laws
which govern the circulation. we shall find
one Of the most important to be that. as
the circulation is increased or decreased
the rest of the property viii, all other cir
cumstances remaining the saine, be decreas-
ed or increased in value exactly in the same
proportion To illustrate If a COM
munity should have an aggregate amount
of property of S31, 900. 900, of which
81, 900. 900 constitutes its currency; if that
81, 900, 600 be reduced one-tenth part.
that is so say 800, 900, the value Of the
rest viii be reduced in ike manner one
tenth part, that is So, 900, 900. And
here very important fact discloses itself.
which explains why the currency should be
touched with such delicacy and why sta
bility and uniformity are such essential
qualities; | mean that small absolute re-
duction of the currency makes great abso-
lutte reduction of the value Of the entire
property of the community, as We see in
the case supposed, where a reduction of
500, 900 in the currency reduces the az
gregate value of property So, 900, 900.
sum thirty times greater than the reduction
Of the currency.
CURRENCY CONTROLS VALUES
From this results an important consd-
Grafton. If we suppose the entire currency
to be in the hands of one portion of the
community, and the property in the hands
of another portion, the former, by having
the currency in their possession, might con-
troll the value of all the property in their
community, and possess themselves of it at
their pleasure Take the case already
selected, and suppose that those who hold
the currency, diminish ii one-half by
abstracting it from circulation, the effect Of
which would be to reduce the circulation to
$500, 900: the value of property would
also be reduced one-half-that is. Sl5,-
900, 000 Let the process be reversed
and the money distracted be gradually re-
stored TO circulation, and the value of prop
erty would again be increased to s30,-
000,0 1t must be obvious that BY
alternating these processes and purchasing
at the point Of the greatest depression when
the circulation Is the least, and selling at
the point of the greatest elevation, when
it is the fullest, the supposed moneyed
class, who could at pleasure increase or
diminish the circulation by abstracting or
restoring it, might also at pleasure control
the entire property of the country.
SIT results from this that there is dan
gerous antagonistic relation between those,
who hold or command the currency and
/ the rest of the community; but fortunately
for the country, the holders of property
and of the currency are so blended as not
to constitute separate classes. Yet Ii Is
worthy of remark-it deserves strongly 10
attract the attention of those who have
charge of the public affairs-that under
the operation of the banking system, and
that particular distribution of property
existing in the shape of credit or stocks,
public or private, which so strikingly dis
tinguishes modern society from all that
preceded it, there is strong tendency to
create a separate moneyed interest, accom-
panied with all the dangers which must
necessarily result from such separation,
which deserves TO be most carefully watched
and resisted .
THE ''MoNEYED INTEREST NOW EXISTS.
The relation between money and other
forms of property has never been more
plainly and impressively described than in
the above extract From this matches
exposition of the subject it appears that
the stability and uniformity Of this rela-
tion-in other words, of the currency
depend not upon the character of the
material of which money is made, but upon
the quantity of it IN circulation. and that
stability of the currency can only be real
lied by adjusting its quantity and keeping
it adjusted to the wants of trade.
1t also shows that the practice Of drain
ing or reducing the circulation of the
financial system. for the alleged purpose OF
improving It's quality, is analogous to the
old practice of blood-letting to cure the ills
of the human system. In the light Of 1t
We can understand how the expulsion OF
silver from the money stock has had the
effect for the last twenty years of subject
ing toa creeping paralysis the industries Of
gold standard countries while those OF ST.
yer-using countries, by reason of their ex-
emption from this malady, have, during
the same period been unusually prosperous
1t cannot es ape the observation that the
progress of events since this speech was
delivered has under the operation OF the
banking system aud that particular dlstrlo
button of property existing in the shape Of
credit or stocks, public and private, al
ready created 'moneyed interest which
has developed dangerously antagonlstlc
relation between those who hold or COM
mand the currency and the rest of the COM
munity. The executive branch OF the
Government, in defiance of the popular
will, is increasing the public Indebtedness
in the form of bonds, issued in the name
of the people, at rate which reminds US
of the war period, for the sole benefit OF
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