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Read Ebook: A Speech on the Principles of Finance by Woodhull Victoria C Victoria Claflin
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A SPEECH ON THE PRINCIPLES OF FINANCE,
VICTORIA C. WOODHULL,
DELIVERED AT
COOPER INSTITUTE, NEW YORK CITY,
THURSDAY, AUGUST 3, 1871.
NEW YORK: WOODHULL, CLAFLIN & CO., No. 41 BROAD STREET. 1871.
THE PRINCIPLES OF FINANCE.
MONEY! IS IT A PRINCIPLE OR A PROPERTY?
To the careful student of history, there is a very great deal more to be considered than the mere political facts that stand as landmarks along the path of progress which the nations have traversed since the plains of Iran poured forth their hosts westward. These facts are the mere externals that adorn the pages of historic lore, and embellish the memories of the great men who have lived in and moved the world at various times in various nations, or which clothe the lives of tyrants and usurpers with their just reward.
It has never been pretended, so far as I know, even by the profoundest political economists, who are sticklers for the gold standard, that any financial systems the world has ever known were developed by the scientific application of self-evident truths, which is the nature of principles.
Therefore I shall present no principals, per cents. and compounded amounts, except, perhaps, as examples to illustrate the mathematical impossibilities of the fallacious theories by which financiers have attempted to dazzle the world, but who have only succeeded in accumulating in the hands of a very select few that which by an exact justice should belong to, and be distributed among, the people generally.
Everybody knows that for a certain quantity of gold a certain quantity of cotton may be obtained, and for a certain quantity of corn, a horse. The fact that the horse is obtainable by the corn does not convert the corn into money, neither does gold any more than the corn become money because the cotton is obtained thereby. The gold for the time is equal in value to the cotton, and so is the corn to the horse. Now, what is required of money is this: Suppose the gold, cotton, corn and the horse to be of equal value, a person possessing an amount of money representing the value of either of the four can, at his discretion, purchase whichever he may choose; since the money would equally represent the gold, cotton, corn and the horse. Anything that may be used for money that will not do the same thing for any variety of the products of labor, values being equal, is not money in any sense of that term.
Every attempt ever made to compel gold to answer the demands of money has been a disastrous failure. So long as a country enjoys continuous prosperity under a gold standard of value, it is all well enough. The people make use of an expanded volume of currency in the full faith that prosperity will continue and everything be smooth and right.
All bank notes in their ultimate effects are frauds upon the people, and their continuation as a circulating medium is only possible because that part of the people who suffer from them have not yet risen into a proper understanding of the question. The time is, however, near at hand when those who have reveled in the result, of the wear and tear of the muscle, and the sweat of the brow, of the common laborer, will be compelled to produce honestly and equitably everything they would enjoy.
What more than this can be demanded of money; or what better thing invented as money; or what more capable of inspiring and maintaining an even and legitimate confidence?
In other words, the people should demand that the Government issue one thousand million dollars in bonds, bearing three per cent. interest, payable in currency, and that it issue one thousand million dollars of circulating medium or money to be loaned to whomsoever deposits the bonds as collateral; all loans to be made at three per cent. per annum; to be for six months, with two renewals of three months each, one-half payable on each renewal. The principle underlying the time being that all credits should be settled with each year's products.
It may be remarked, parenthetically, here, that even three per cent. per annum interest is altogether too greatly in favor of capital. A careful calculation of interests and general increase of the nation's wealth discovers that less than a two per cent. interest is required to make the capitalist and the laborer stand upon an equality. Had I the time I would be glad to present you some figures to show to what condition we are tending. I will simply remark, however, if capital continue to receive the present rates of interest for the next thirty-five years, at the end of that time it will have absorbed all the wealth of the country. That is to say, that interest compounded at the rate of 6 per cent. upon the present Banking Capital will amount to a sum larger than the present aggregate of wealth together with the same rate of increase which has governed it during the past, added thereto. Is not this a sufficiently alarming fact to cause people to stop and consider the despotism into which they are rapidly merging?
The national bank and other currency would be gradually called in at the rate of, say ten per cent. a month.
I may add in justification of this plan, that if the Government can loan three hundred millions to the banks for nothing, it can loan to the people for three per cent.; if at the same time it can pay three per cent. on its bonds and in currency, instead of six per cent. and in gold, it secures a new-found advantage.
Means can be easily devised to make all post offices offices for loaning, as they now sell post office stamps and money orders.
In fine, and to resume, the idea of money must first be separated from that of the intrinsic value of gold, or any other commodity, and confined to the mere capacity of representing all commodities, and so of facilitating the exchanges of wealth. This, it has been abundantly demonstrated, can be as well, and for various reasons, better done by strips of paper, properly stamped and signed, than by gold or any other metal.
In the next place, these strips of paper, signed by the Government, with the credit and wealth of the whole country, are better than individual promises; though the issuance of individual promises should not and need not be prohibited, as we do not now prohibit anybody from making or receiving private notes, drafts and checks.
Again, the Government Money need not be redeemable, but only convertible into new strips of paper when the old ones are worn out, and into commodities when they are used in trade, and into other Government Securities bearing interest, as I have pointed out.
Another somewhat similar idea was glanced at in passing--that of a definite method of determining scientifically the equitable rate of interest. This I cannot stop now to explain. It will, however, only be when we come quite down to that basis, that the full value of this financial system will be experienced.
Finally, in its basis, this system of Government money is money issued at the mere cost of printing and circulating; but by adjoining with it the idea of a complete, simple and exceedingly economical means of raising the revenue of the country, the three or four per cent. is paid to the treasury; that is to say, by the people individually to the same people in their collective capacity. Under this system all the various revenue officials and tax assessors and gatherers would be dispensed with, and a vast system of economy inaugurated, which, in a few years, would transpose us from a borrowing to a loaning nation, making us the financial example for all the world. This it also seems to me is another invaluable feature of the system, all of which I, however, respectfully submit to the decision of the people.
TRANSCRIBER'S NOTES
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