The Crisis

The term coin here used means only gold now, and the law, in order to enable the secretary of the treasury to carry out this plan for retiring the greenback money from circulation, authorizes him to sell interest bearing bonds to obtain gold and to use such surplus revenues as he may have on hand. The government has undertaken two things; first, the shrinkage of the amount of currency, and second, the possession of gold in such quantity that the one can be converted into the other. The smaller, therefore, the quantity of gold that can be obtained, the greater must be the reduction of paper money in order to rest dollar for dollar on such a narrow metallic basis.

It becomes important in this view to know what has been done under the law of January, 1875, in accumulating gold as a basis for specie payments a year hence. Many efforts have been made to ascertain the exact amount of actual gold which this government now owns, none of which has been entirely successful, for the reason that the sum is so small, but it is perfectly safe to state, after deducting the amount due as interest on bonds, that there are not this day fifty millions of gold in the United States Treasury and in all the national banks besides. If resumption is to take place on that basis, the gigantic task of this poor pittance will be to stand good for the redemption of $350,007,308.50 of legal tender notes, commonly called greenbacks, and $391,874,236 of national bank note circulation, making in all the sum of $641,881,514.50. It is very plain, even to those who believe that one dollar in gold is sufficient for the circulation and redemption of three dollars in paper, that our present condition of one dollar in gold to about fourteen in paper must be radically revolutionized against the day fixed for specie resumption.

What probability is there of any large increase of gold in the vaults of the Treasury? Will specie resumption be reached within the present year by leveling up the amount of gold in our possession or by leveling down the amount of currency in circulation? No one claims that foreign nations will supply our want of gold. On the contrary, nearly all the produce of our mines goes to them to pay interest on public securities held abroad. But even if this government could turn the entire gold yield of every American mine into the treasury between this and the 1st day, 1879, the supply will fall far short of a specie basis for one-tenth part of our present circulation. During the year that has just closed, 1877, the gold coinage of our mints reached only the sum of $44,078,199. The bulk of this sum went abroad, a portion of it is hoarded by private parties, and a small fraction, perhaps, found its way into the coffers of the government. An examination of the report of the director of the mint for 1877 shows that the entire coinage of gold in the United States to the present time amounts to but $983,159,694. This is the slow and comparatively small production of gold money in the long space of 84 years—nearly the whole lifetime of the American republic; less than $1,000,000,000; less than enough to pay for one single crop of agricultural products in the states of Ohio, Kentucky, Indiana, Illinois, Michigan, Wisconsin, Missouri, Minnesota, Iowa, Kansas and Nebraska, and less than one half enough to pay the national debt as it exists to day.

Is there no lesson of wisdom in these figures for the statesman of these times? They are the experience of almost a century. Do they encourage any reasonable being to believe that gold enough can be obtained by this government in the next twelve months to redeem its currency and to enable its citizens to do business on a specie basis? Is there anywhere in America or in the whole universe a new fountain of gold, pouring forth increased volumes from which our parched and scanty resources may be replenished. The very reverse is the fact. Old fountains are drying up; their streams are diminished; no wizard's rod can smite the earth and indicate where new supplies will break forth.

But the requirements of the government for gold constitute but a small portion of the demand. The American people at this time are enormously in debt; more than any people beneath the sun. Their State and municipal debts of all kinds, and their private debts to each other, have been variously estimated at from six to ten thousand million dollars. Every dollar of this vast indebtedness will call for gold coin after the 1st day of January, 1879. Where are the people to obtain sufficient gold with which to pay their debts and transact their business? The question is one that will terrify every man who owes his neighbor anything, for there is not now, and never has been at any one time enough gold in circulation as money on the face of the whole earth to meet this demand. If, therefore specie payments are in reality to be resumed in January, 1879, the government has yet to destroy at least two thirds of its present paper circulation and the people, on this reduced basis, and under the gold standard alone, will be compelled to meet their debts and taxes, which have undergone no diminution.