FELLOW-CITIZENS: My first knowledge of the beautiful and historic valley of the Shenandoah was obtained in the rough school of the great Civil War, and with the aid of very competent instructors engaged on opposite sides of that terrible conflict. It is a great satisfaction to revisit the Valley, and to refresh my recollection of its superb scenery, and of the places made interesting and famous by the War. I now meet its people under circumstances far more auspicious than any of us, whether we were soldiers or citizens during the contest, could then have deemed possible within the period of our lives. For the first time in many years we see the American people, in the midst of interesting and important elections, with their attention chiefly engaged about questions relating to the material and business interests of the country, and in regard to which, in all the States, the people are beginning to take sides, without much reference to sectional or color lines. Whatever evidences of the old bitterness may be exhibited in any other part of the country, we know that here the general wish is that the sectional controversies which have so long disturbed our American society may be permanently settled, and that, in pursuance of the Constitution and the laws, peace and union may be restored and forever firmly established.
During the last month I visited the agricultural fairs in several of the Northwestern States. In addressing the people on those occasions, it seemed to me not improper to call their attention to the condition of the financial affairs of the Government of the United States. This was done with a double purpose. It was my hope that it would give encouragement and confidence to those who were looking anxiously but hopefully for better times. I hoped also that the facts and figures presented would aid in the formation of correction opinions on the subjects which now mainly interest the people. With the same general purpose I now desire to spread before you, very briefly, the views of some of the Fathers of our country- patriots whose names and characters and services are very familiar to the whole country, and very dear to the whole country. In this part of Virginia especially, with which some of them were identified, and among the descendants of those who were associated with them, the opinions of the men who made Virginia so famous will, I am sure, be received with more than ordinary consideration.
On the subject of money, and on the question of what is a sound, safe, and stable currency, let us hear and heed the advice of the Fathers.
Washington, in a letter to Thomas Stone, dated Mount Vernon, February 16, 1787, said:
“I do not scruple to declare that, if I had a voice in your Legislature, it would have been given decidedly against a paper emission, upon the general principle of its utility as a representative, and the necessity of it as a medium.” * * * “I contend that it is by the substance, not with the shadow of a thing, we are to be benefited. The wisdom of man, in my humble opinion, cannot at this time devise a plan by which the credit of paper money would be long supported; consequently depreciation keeps pace with the quantity of the emission, and articles, for which it is exchanged, rise in a greater ratio than the sinking value of the money. Wherein, then, is the farmer, the planter, the artisan benefited? The debtor may be, because, as I have observed, he gives the shadow in lieu of the substance; and, in proportion to his gain, the creditor or the body-politic suffers. Whether it be legal tender of not, it will, as has been observed very truly, leave no alternative.” * * * “I shall, therefore, only observe generally, that so many people have suffered by former emissions, that, like a burnt child, who dreads the fire, no person will touch it who can possibly avoid it. The natural consequence of which will be, that the specie, which remains unexported, will be instantly locked up.”
In a letter to Jefferson, August 1, 1785, Washington said:
“Some other States are, in my opinion, falling into the very foolish and wicked plans of emitting paper money. I cannot give up my hopes, however, that we shall ere long adopt a more just and liberal system of policy.”
In a letter to Richard Henry Lee, President of Congress, dated Mount Vernon, August 27, 1785, Washington said: “I have never heard, and I hope never shall hear, any serious mention of a paper emission in this State; yet such a thing may be in agitation. Ignorance and design are productive of much mischief. The former is the tool of the latter, and is often set to work suddenly and unexpectedly. Those with whom I have conversed in this part of the State reprobate the idea exceedingly.”
Jefferson’s opposition to irredeemable paper money was decided, and is too well known to need many citations. In his day schemes of inflation were mainly proposed by the friends of unlimited issues of bank-paper, and his most vigorous denunciations were directed against such issues, but his arguments apply with equal force against all forms of irredeemable paper money. To Colonel Yancy he wrote, January 6, 1816: “The American mind is in a state of fever, which the world has so often seen in the history of other nations. We are now taught to believe that legerdemain tricks upon paper can produce as solid wealth as hard labor in the earth. It is in vain for common sense to urge that nothing can produce but nothing; that it is an idle dream to believe in a philosopher’s stone which is to turn everything into gold, and to redeem man from the original sentence of his Maker, ‘In the sweat of his brow shall he eat his bread.’”
Jefferson, in a letter to John W. Epps, November 2, 1813, said:
“The sum of what has been said is that our medium should be so proportioned to our produce as to be on a par with that of the countries with which we trade, and whose medium is in a sound state; that specie is the most perfect medium, because it will preserve its own level; because having intrinsic and universal value it can never die in our hands, and it is the surest resource of reliance in time of war; that the trifling economy of paper as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals; that it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.”
To Colonel Carrington, May 27, 1788, he said: “Paper is poverty; it is only the ghost of money, and not money itself.”
James Madison, in a letter to Thomas Jefferson, dated August 12, 1786 said:
“Whether Virginia is to remain exempt from the epidemic malady will depend on the ensuing Assembly. My hopes rest chiefly on the exertions of col. Mason and the failure of experiments elsewhere. That these must fail is morally certain; for besides the proof of it already visible in some States, and the intrinsic defect of the paper in all, this fictitious money will rather feed than cure the spirit of extravagance which sends away the coin to pay the unfavorable balance, and will therefore soon be carried to market to buy up coin for that purpose. From that moment deprecation is inevitable. The value of money consists in the uses it will serve. Specie will serve all the uses of paper; paper will not serve one of the essential uses of specie. The paper, therefore, will be less valuable than specie.”
Madison, in a letter to C. D. Williams, dated February, 1820, said:
“Whenever the paper has not been convertible into specie, and its quantity has depended on the policy of the Government, a depreciation has been produced by an undue increase, or an apprehension of it.”
In a letter to Thomas Jefferson, dated July 18, 1787, Madison said: “Nothing but evil springs from this imaginary money wherever it is tried, and yet the appetite for it where it has not been tried continues to be felt. There is great reason to fear that the bitterness of the evil must be tasted in Virginia before the appetite there will be at an end.”
Richard Henry Lee, in 1785, in a letter to Washington, which drew from Washington the reply already quoted, asks: “Is it possible that a plan can be formed for issuing a large sum of paper money by the next Assembly?” And he adds: “I do verily believe that the greatest foes we have in the world could not devise a more effectual plan for ruining Virginia. I should suppose that every friend to his country, every honest and sober man, would join heartily to reprobate so nefarious a plan of speculation.”
George Mason, to Washington, at a somewhat later date, wrote:
“I have heard nothing from the Assembly except vague reports of their being resolved to issue a paper currency; upon what principle or funds I know not; perhaps upon the old threadbare security of pledging solemnly the public credit. I believe such an experiment would prove similar to the old vulgar adage of carrying a horse to the water. They may pass a law to issue it, but twenty laws will not make the people receive it.”
Chief Justice Marshall, in a decision of the Supreme Court, said:
“Such a medium (paper money) has been always liable to fluctuation. Its value is continually changing; and these changes, often great and sudden, expose individuals to immense loss, are the source of ruinous speculations, and destroy all confidence between man and man.”
It is not necessary for my purpose to make further quotations from the Fathers. They embodied their opinions in the American Constitution. The money of the Constitution is coin. In making money which has intrinsic value, the constitutional money of our country, the Fathers adopted the money of the world. By a law resting on the concurring judgment and common consent of mankind, in all ages and countries, the precious metals have been the measure of value – the money of the world. It is a law that is fundamental and irrepealably. It can no more be repealed by act of Congress than the law of gravitation. If we would have an early return of business prosperity, let us not try to be wiser than the Fathers, wiser than the Constitution, and wiser than human nature. In the present condition of our country, our progress towards prosperity as a nation and as individuals depends upon having a good public credit and a sound constitutional currency.