Proceedings & Collections - NSHS - Vol. IV

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   What is meant by intrinsic value? The advocate of the gold standard tells us that intrinsic value is that commercial value which resides in the money, thing or metal, and that there must be a correspondence between that thing and the coin value or the money is flat money, and therefore unsound.
   The material of which money is coined or on which it is stamped is withdrawn from the field of commerce when being used as money. It is as dead in its effect upon the commercial value of the class of articles to which it belongs as though it were in the bowels of the earth or in the bottom of the ocean; it is taken out of circulation as an article of commerce, and is used exclusively as a medium of exchange, performing the money function and losing its place as an article of commerce.
   Works on political economy of recent date are discarding this doctrine of intrinsic value in money. It is the function, the office performed by the thing called money, which gives it its money value. It is the volume, the number of units in circulation, and which are exchanged against all other things, which gives money its proper power and its proper money value. There is no more necessity for a dollar's being made of gold, or silver, for that matter, than there is for a yardstick to be made of ivory or gold. You might as well say that by measuring a yard of cloth with a yardstick made of gold, you would give the cloth measured more value than it would have if it were measured with a yardstick of wood or some other inferior material. The wealth resides in the articles which are exchanged, and not, in the money which effects the exchange. SECOND FALLACY.

That a gold standard would not produce contraction.

Mr. President--Suppose in this country a law were passed prohibiting the consumption of one class of meat products, does not every citizen know that the prices of other classes which were not prohibited would be doubled in value?
The demand would be doubled for them, and that is what increases prices. If the government should, for instance, strike down wheat, if it should be decreed that the people should not eat wheat bread, would it not create a greater demand for corn, oats, and other kindred products? It certainly would, because the functions performed by wheat would be transferred to other products. So it is with silver. Whenever the government strikes down silver, and says that it shall not be used for money purposes, and puts the entire

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basis of the currency upon gold, that increases the value of gold and gives it a greater purchasing power than it would otherwise possess. That is contraction. THIRD FALLACY--OVERPRODUCTION.    But one of the principal arguments used against the use of silver is what my distinguished friend from Illinois (Mr. Palmer) lamented awhile ago as overproduction. It is claimed, and claimed seriously, that silver is being produced in such great quantities as to cause an overproduction of the metal, and that the fall in the bullion price of the metal is caused thereby. Therefore my friend from New Jersey (Mr. McPherson) says the parity cannot be maintained. Why there is overproduction we are not told. Never was there a ranker fallacy promulgated upon the face of the earth than this doctrine of overproduction. There is not a respectable political economist from the days of the senior Mill to the present moment, that has taught it. It is simply one of those fallacies that we find constantly urged from the stump, that we find constantly advocated by a certain class of newspapers, the effect of which is to mislead the people.
   Right here, Mr. President, let me say that gentlemen who advocated this doctrine of overproduction never seem to think of the fact that in this land of plenty, where overproduction exists, as they claim, want is constantly increasing; and that there are hungry men, hungry women, and hungry children in a country where prices are, falling, as they claim, in consequence of overproduction.
   It is under consumption and the lack of means of distribution, one principal element of which is money, that produce local and temporary congested conditions in trade.
   And it is characterized as a fallacy here and throughout these works [Reading].
   It is perpetually reappearing in different forms, among which may be here specified the belief that our colonies are useful because they provide a market for our exports.
   When the people of this country, the farmers and laborers, and what I may properly term the great masses of the common people, feel the effects of this system of contracted money, they are told that their misfortune is due to over production; that they produce too much, that God is too bountiful, that the people suffer too much corn, wheat and oats to grow, and produce too much food. Therefore, in land of plenty, in consequence of there being too much, there must be starvation and hunger as a result. In consequence of too much, laboring men must be poor.

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FOURTH FALLACY--BALANCE OF TRADE.    MR. ALLEN: Another of the fallacies taught, in my judgment, in this discussion is the fallacy of the balance of trade. I do not mean to say that the balance of trade is not desirable under certain circumstances, but I do mean to say that a balance of trade in and of itself, bought by a sacrifice of the property and labor of the people, is a curse rather than a blessing. Too long the people of this country have been told that a favorable balance of trade was per se evidence of prosperity. Suppose that every gold dollar upon the face of the earth was bought by this Nation at the sacrifice of the price of our labor and our property, would that be any evidence that we were a prosperous nation under those circumstances?
   It is only when a balance of trade represents some profit to a nation that it is a favorable balance of trade; it is only when it represents some profit to its people that it is desirable. If it is bought at too great a sacrifice, if civilization itself has to be impaired, if labor has to be debased, if we are to be brought down to the conditions prevailing in Europe, then we do not desire to pay the price for the balance of trade in gold dollars. FIFTH FALLACY--NATURAL PARITY.    I ask any Senator in this chamber when he talks about maintaining a natural parity between gold and silver, is it possible? Certainly not. If there was a natural law of equality between the two metals, would not one grain of the metal silver, be worth as much as a grain of gold? If there was a natural parity existing, would not that be true?
   The relation of gold and silver, like the relations of any other articles, must be controlled by the law of supply and demand.
   As long as Senators talk about the commercial value in the money metal or the money thing, there can be no such thing as a parity between gold and silver, because today the demand puts the price of one up and the price of the other down, when to-morrow, next week, next month or next year the conditions may be entirely different, and the metal that occupies one position to-day may be absolutely reversed then. That is simply following the supreme law of supply and demand. So it is mere nonsense to talk about maintaining the parity when a natural parity does not exist.
   But if you can establish and maintain a parity when you leave the fallacy of intrinsic value, then you come to the sensible basis, the basis which controls this matter; when

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you declare by statute that so many grains of silver shall have the force of money as compared with a grain of gold, when the power of the law behind that makes it perform the office of money, gives it full legal tender and debt-paying power, and establishes a law of equality between the two metals while being used as money. That is the real parity, and the only parity that can either be created or maintained. SIXTH FALLACY--SHERMAN LAW THE CAUSE OF PRESENT TROUBLE.    Mr. President--It is true that every dollar of gold that left these shores during the last few months has returned, except about $16,000,000, and that will return if these men who control the money market will permit it to return. So that if its departure was due in any measure to the Sherman act, then with equal propriety we may say that its return is due to the same act.
   Gold will shift from America to England, back and forth, according to the demand for gold itself, wherever the rate of interest is the highest. If there is a greater demand for it in England than there is here, it will go there. Like everything else, whenever the demand is greater for it here than it is in Great Britain, when it is worth more here, it will come here. So we are engaged in the enterprise of putting the gold of the world upon an auction block and entering upon a wild, nay, a senseless, bidding for the possession of gold, sacrificing our property and sacrificing the prosperity of our people in a senseless race of that kind. SEVENTH FALLACY--DISHONEST MONEY.    We have been told repeatedly, and are daily told, that there is such a thing as sound money in the country and such a thing as dishonest money.
   Mr. President, there is not a dollar in this nation, with full legal tender qualities, from its origin to this moment, that was not an honest dollar and worth as much as any other dollar. It is only because the volume of gold is scarce; because it is in the grasp of the Shylocks, because they control it and, through it, control the destinies and the progress of the peoples of the Earth that we hear so much about the necessity of sound money--of honest money. This very heresy of intrinsic value is one of the things that has been seized upon to deceive and mislead the people, thus permitting a gang of aggressive money-changers to control the destinies of the people through a limited volume of money, through the control of gold.

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I repeat, sir, during the interesting discussion in this chamber, extending now over sixty days, no Senator has offered a reason (if he has I have not heard it) why any special commercial value should reside in silver or gold or paper used as money. MONEY POWER. Now, what is the money power? The expression has been used here a great many times. It has been used by myself, and it has been used by others. I say to the Senators that the money power, in my judgment, is that class of persons who control the great debt, bonds, stocks, and mortgages of this country and of Europe--that body of men who are directly interested in a constantly appreciating money, whose fortunes are made out of bonds, mortgages, stocks, and evidences of indebtedness of various kinds; that body of men, small though it may be, in this country and in Europe who are combined against the prosperity of the farmer and laborer throughout the civilized world--that is the money power.

In his conclusion he traced England's oppression of the original American colonies, her acts of tyranny in the revolution of 1776 and in the war of 1812; and characterized the bill as a monster of iniquity.

This is a Trojan horse; but underneath and behind this whole scheme I see two monster Shylocks, like Argus, hundred-eyed, and like Briareus, hundred-handed. One of these is England, and the other the Shylocks of Wall Street and the East, both alike reaching out their long, bony and merciless hands for their pounds of flesh, regardless of the welfare of the laboring classes and producers of this country, regardless of the prosperity of this country, but interested solely and alone in their own selfish aggrandizement.
In 1811, when the charter of the United States Bank expired, the stock of which had been paying an annual dividend of from 8 to 10 per cent, it was discovered that the English had gotten control of nearly all the stock. Since then she has gradually gotten control of our carrying trade, bleeding us of millions of dollars every year. She has gotten control of large areas of our public lands, of immense tracts of our coal, timber, and mineral lands, which she has bought for a song, and from which she will reap immense profits. She has bought large interests in our most profitable flour mills, our breweries, stockyards, and manufacturers. She holds our bonds and has made millions specu-

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lating in them. She draws annually from the United States over $100,000,000 in the shape of interest and profits alone. Notwithstanding all these things the agent of the Rothschilds now comes in the year 1893, in the year of the Columbian Exposition, and the one hundred and seventeenth year of our Independence, and demands of our Secretary of the Treasury in these United States of America that he issue $150,000,000 worth of bonds.

American, British, Grecian and Roman history, with ancient mythological and patriotic allusions, gave special force to his closing words. A journal at the capital, not in sympathy with Populist views, said of this remarkable effort:

It is an effort that does credit to the patient research of the Nebraska Senator and contains a vast amount of statistical information. It also shows that whenever an emergency arises requiring such a speech Mr. Allen is fully equal to its requirements, and that when it comes to colloquial debate on the floor of the Senate, he is quite as ready in answering interrogatories as in propounding theories.
It is furthermore apparent from the classical peroration with which Mr. Allen closes his remarks that come what may he is never to be driven from his position or cajoled out of it. "So far as I am concerned," he says, "I ask no favors and wear the collar of no man; and when the Shylochs of England, Wall Street and the East, and their coadjutors, ask that the rights of the people be surrendered, my answer, so far as I am concerned, will be that not one jot or tittle of those rights shall be surrendered while life lasts, if I can prevent it; we will meet them in Boeotia before they proceed to Attica, and we will not permit them to put their shirt of Nessus upon the back of American labor. We bid the Shylocks and money lords, here and hereafter, open and bitter defiance."

Subsequently, before the final vote taken on the repeal bill, allowing no favors to silver, Mr. Allen said:

I am sorry to see what may be called a backdown to some extent on the part of some of the advocates of free silver. If I had the experience in legislative work of some of the Senators who entertain the views I entertain, I should not only stay here until next summer but I would stay until next year, And I would continue to stay until the administration changed before this law should be unconditionally repealed, and before the great wrong which will be

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inflicted upon the American people by this unconditional repeal should be done to them and their interests.
I say now, Mr. President, if there are any Senators in this chamber who have the true interests of the American people at heart, if there are enough of them who will raise the banner of, the free and unlimited coinage of silver and carry it to victory here, I believe victory can be accomplished; and for one I will. stay with that banner as long as my strength lasts, entirely regardless of the time it may take to fight this battle.

During the session of ninety days, Mr. Allen showed, by the introduction of resolutions of inquiry, and committee work, ability and fidelity, which had their culmination in the presentation of a resolution for arresting immigration "until a change in the labor market." But the adjourning fall of the Vice-President's gavel precluded action.

FIRST REGULAR SESSION FIFTY-THIRD CONGRESS.

His record made in the extra session indicated that in future he was to be found among the careful workers in committees, and able debaters upon the floor of the senate. Early in the session Senator Allen is found vigorously contesting with Senators Hoar of Massachusetts, Hunton of Virginia, and Faulkner of West Virginia, in behalf of grantors in trust deeds, as against grantees, who have generally had everything they desired. From numerous debates running through several months, upon tariff reduction, only a few items can be extracted, for want of space.

POLICY. MR. ALLEN: I say that the policy of taxing materials that go into the homes of this country is unwise. It should be the policy of a great and enlightened nation like this to refrain from taxing anything which is essential to the preservation of human life. The necessary homes which shelter our people from the blasts should be free from taxation, if it is possible to render them free. All the clothing and food necessary to protect and sustain our people should be free from taxation if possible, or at least, the lowest rate of taxes should be levied upon them.
We use much rough lumber in the construction of fences and of outbuildings. These things are a necessity to the people of the State of Nebraska, and not only to them, but

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to the seven or eight million people who live in the prairie States; and yet you are perfectly willing to take these people by the throat and hold them up, as the highwayman holds up his victim, and take money out of them for the purpose of putting that money in the pockets of a few men along the northern border of the United States. BOUNTIES.    I desire to see the time come in this country when sugar shall be free. Although I represent in part a great commonwealth where the sugar beet can be cultivated with profit, and one of the largest beet sugar factories in the United States is situated in the county in which I have the honor to reside, I do not believe that it is either wise on the part of this government to adopt the bounty system as a policy, nor do I believe the government has power under the constitution to encourage the development of anything by a system of bounties.
   I recognize, however, that when the government has offered a bounty, and upon the strength of the offer contained in the statute an industry is developed which perhaps would not be developed but for the granting of the bounty, whether the government had the power or not, it certainly has morally no power to suddenly take the prop from under that industry and permit it to fall without any warning of its purpose to eventually recede from the bounty system.
   Therefore when my colleague offered his amendment, which looked to a gradual reduction of the bounty system, until it would expire in 1905, dropping one-tenth each year, I voted for it. When he offered his amendment proposing to make the bounty 1 cent instead of 2 cents a pound, I voted for it, because both propositions looked to the gradual extinction of the bounty system, and because to so vote would not seriously wrench the industry which is being developed in my state today. PROTECTION    No, Mr. President, that is not the trouble with the Western farmer. The trouble with the Western farmer, in the first instance, is that he is eaten up by excessive rates of transportation. By the time he hauls his products across the mountains from the prairies of Nebraska fifteen hundred miles to New York market, he has consumed a valuable portion of the product of his field, and by the time he invests the money he gets out of the remainder in highly

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protected articles of consumption, he is left practically without any surplus for his year's labor.
Give the farmer of the West an equal show in the race of life, and he does not ask protection from any government; give him an opportunity to buy in the open market, as he is compelled to sell in the open market; and control in his interest, and in the interest of the country at large to some extent, the question of transportation, and the farmer of the West does not stand in congress asking for protection or assistance at our hands. BITTER RETORT.

The debate, having elicited much asperity, evoked a spirited reply to Mr. Chandler of New Hampshire.

MR. ALLEN: Mr. President, I desire to say in as polite language as I can to the Senator from New Hampshire that his statement or insinuation that there is any bargain between any person on this side of the chamber or in the chamber at all and myself is entirely untrue, and I am inclined to think that the Senator from New Hampshire knew it was untrue at the time he stated it. I have made no bargain. I propose to make no bargain. I propose to vote as I see fit upon this measure and upon every other measure that comes before the Senate. If when the pending bill is finally finished it is in my judgment a better measure than the law now in force, I shall vote for it. If it is not, I shall vote against it. In that respect I desire to assure the Senator from New Hampshire that I am a free lance.
I desire to state in this connection that it is none of the Senator's business how I propose to vote upon this or upon any other measure. I am not here to represent his views upon any question. I am sent here to oppose his views upon a majority of the questions that come before this body.

Apparently upon the Napoleonic motto, that nothing had been accomplished while anything else remained to be done Mr. Allen exceeded his former records and made the third or short session of the 53rd Congress one conspicuous for thorough and incessant work. In a voluminous defense of the Populist party and its creed, he charged a union of the Democratic and Republican parties for the salvation of the country, as they understood salvation, and a unity of effort in charging the Populist party as the advocate of vagaries and lack of leadership.

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Mr. President--Sir, from a vote of a little over 1,000,000 in 1892, the Populist party cast a vote of practically 2,000,000 in 1894, an increase of almost 100 per cent., a greater vote than placed Mr. Lincoln in the White House in 1861. 1 thank God this moment that the light is beginning to dawn today upon the common people of this country out of the darkness and gloom and wrong and oppression through which they are and have been passing; that a ray of light shines over the broad expanse of this country, and in my judgment in 1896 both the old parties will practically pass out of power and this new party be brought into control of the government in all of its branches. POPULIST CREED.

His Populist creed, as given, included the coinage of both gold and silver it the ratio of 16 to 1, supplemented by a legal tender paper currency--taxes limited to the necessity of the government--a graduated income tax-trusts and combinations injurious to commerce, labor and industry to be prohibited abuses of pooling and watering stocks and discrimination in railroad rates, and of corporations, to be corrected by law--contract labor denounced--opposition to army and navy increase in time of peace--election of President by direct vote of the people--pensions for disabled soldiers--denunciation of anarchy--purity of the ballot box--opposition to interest bearing bonds, and government divorcement from banks.

SILVER COIN REDEMPTION.

Finding $835,534,088 outstanding paper money by law redeemable in coin, he argued that the Secretary of the Treasury should redeem in silver where it was evident that an attempt was being made to deplete the treasury of gold coin for the purpose of forcing the issuance of gold bonds, payable in gold, and to perpetuate a national debt, and enlarge the issue of national banks. In this spirit he denounced the issue of $500,000,000 bonds payable in fifty years.

In 1874, when there was a run upon the Treasury Department, when this country was experiencing a financial panic, the then Secretary of the Treasury issued $26,000,000 of treasury notes in excess of the number now in existence.

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Under the provisions of the statutes which are preserved to-day the Secretary of the Treasury has ample power to issue $54,000,000 of treasury notes, non-interest bearing notes. Why not issue those notes and coin the seigniorage, amounting, all told, to $109,000,000, and by that means. prevent the issuance of bonds and discharge the current obligations of the Nation. CONDITION OF ALABAMA.

As the session approached its close, he delivered a speech of great research and force, in favor of an investigation of Alabama, alleging anti-republican government, and in the concluding sentences made plain his theory:

I do not desire to be understood as saying that the States have no rights as States. Our government is a government of enumerated powers. If a power is not expressed in the constitution or is not necessarily implied to carry out some granted power, it does not exist, and cannot be exercised. Nor am I a believer, upon the other hand, in the doctrine that any state in the Union can say that the general government cannot pass its lines and protect its citizens. When this country guaranteed to every state in the Union a republican form of government, it carried with it the power, and the duty as well, to pass the lines of the state that might deny to a citizen any of the privileges or immunities of citizenship, and to protect him in their enjoyment. BENEDICTION.

Near the close of the 53rd Congress, while protesting against appropriating money for the support of a "tin soldiery" in the District of Columbia, at a time when benevolent citizens were voluntarily aiding "drout stricken people in the Northwest," Mr. Allen delivered the following graceful benediction:

Sir, while I am on my feet speaking on this question I wish on behalf of a million and a quarter of as honest, loyal, and intelligent citizens as there are in the United States, who reside in my own beloved commonwealth, to tender their thanks and mine for the splendid action of Georgia, Louisiana and other States, South and East, in bringing relief to a drouth-stricken people. Those people are struggling honestly and faithfully to build up this country and to build up their own private fortune. Misfortune has overtaken them for a second time. For the sec-

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ond time in succession their crops have been destroyed, and they are practically dependent upon the charity of their fellow citizens of the other states. I wish to say to the representatives in this chamber of the states I have mentioned, that the gallant men and women of those states have the earnest prayers and thanks of the people of the State of Nebraska.