of just so much of the wealth of the nation, notwithstanding the manifest fact that no notes could be cancelled by the debtor Treasury until it had secured them by delivering equivalent wealth to the creditor holder.

"When you tell me that you will repeal the legal-tender act and burn up the legal-tender notes I tell you you will burn up $382,000,000 values in this country and you reduce to the extent of $382,000,000 the property of the people of the United States of America."

c) If the value of the notes, or their purchasing power, depended on the volume issued, from the economic point of view, and if the stamp of the Government gave to money whatever value it possessed, the whole problem of prices passed over as by the wave of a magician's wand from the realm of economic law to the realm of legislation. Here was a way out of all the trouble which depressed the people. Here was the time and place to make a new declaration of independence, an opportunity to throw off the galling yoke of natural law! For what other purpose did the Constitution give to Congress the power to "coin money and to regulate the value thereof"?

"I do not consult antiquated theorists of a hundred years ago to determine whether we have, or have not, enough money for the business of the country. Being a practical man, I look upon things as I find them and will insist on a system of finance which has proven beneficial to our people."

....

"Are we to be whistled down the wind and answered by theories from John Stuart Mill or from Bastiat? I hope not."

"I feel compelled to regard the powers of Congress over the money of the Republic absolutely sovereign, complete, indivisible, and unrestrained. . . . . It remained for the Congress of the United States, representing the most intelligent and the most highly civilized people of the world, to coin "the credit of the nation," and it has thus wisely provided a lawful money for the people, an instrument of exchange more perfect than that of any other nation. In our progress and development a great stride was taken in monetary science when the legal-tender act of 1862 was approved by the President of the United States."

d) When these propositions were accepted it was useless to look further for the cause of the hard times. The suffering all came from a contraction of the currency. If it was answered that there had really been no contraction as yet, the reply came quickly that, with the great development of trade and industry in the last few years, and

the natural growth of population, the failure to increase the volume of currency was virtually contraction.

"It was then for want of money and not on account of too much of it, to meet his obligations that he [Jay Cooke] failed. . . . . The injury in every instance can be traced to the want of money and not to a superabundance of it."

"The Senate and the country may see and understand how and why it is that, however hard our farmers and planters may work and toil, however genial and fruitful the season may have been, however plentiful and refreshing the rains may have fallen on the fruitful soil of the West and of the South, prosperity for the want of money was, and is today, an impossibility."

It has been said that the people were not in a position to see clearly the causes of the depression. What they did see was the net results of all the complex forces. These net results were falling prices and an inability to renew loans as they came due. The banks refused to lend, not for want of a circulating medium, but because of the inability of the borrower to assure the repayment of his accommodation. No doubt a large portion of the people believed that the banks enjoyed special advantages under the banking law, and in so far as they were creditors they were favored as all creditors are by declining values, granting that the loan is secure, just as debtors are favored by advancing prices. The attack on the banks was not an essential feature of the movement, but added much strength to it.

e) Assuming then that producers were suffering from a dearth of legal-tender notes, and that Congress had power to remedy or increase this suffering, the attack of the inflationists was naturally directed at three specific acts: the contraction of the currency by the Secretary with the approval of Congress in 1865, the guaranty of payment of bonds in coin by the Act to Strengthen the Public Credit, and the determination to resume specie payments and redeem the legal-tender notes. In this attack is seen clearly outlined the change in moral tone which had come over the country in a single decade. It is safe to say that no prominent man in public life would have dared, even in the darkest day of the war, to advise the perpetuation of the legal tenders, or the scaling down of the bonded debt, even when the bonds were issued in exchange for notes. With this attack upon Congress and the Treasury came a vociferous abuse of capitalists in general, of which the following is a fair example: "We have doubled the indebtedness of the taxpayers of the country by agreeing to pay

the five-twenty bonds in gold, when they were contracted to be paid in greenbacks; but that does not satisfy the insatiate greed, the voracious appetite of the Shylocks and sharks, the bankers and brokers, the money mongers, and gold worshippers, of the country.

"No, sir, these lineal descendants and next of kin to the sordid and mercenary crew whom the Saviour of the world when on earth whipped and scourged from the temple at Jerusalem, must add to the intolerable burden of debt of the people by bringing the price of everything down to the standard of gold, by contracting the currency for the purpose of accomplishing that sublimest of all follies in the present condition of the country-the resumption of specie payment."

f) More important than the attack upon the creditor class itself was the symptom of social disease indicated by this new and distorted. view of the obligation of the Government's contract-the pledged "faith of the nation," which by these same partisans was said to make the notes as good as gold. Men would assert that the value of the promises of this great nation never could depreciate and in the same debate gloat over the fact that claims against the Government could not be enforced.

"It is known to every gentleman that you passed an act in 1869 saying you would redeem this debt in gold. Suppose you did. It did not form any part of the contract. It was a legislative act and bound nobody. Whenever you repeal it it is at an end."

g) Finally, in order to buttress this theoretical structure, illustrations from history were given, and alleged conditions were described with an utter disregard of facts. As an instance, one writer asserts, to prove the influence of the quantity of money on prices, that "the United States had $1,800,000,000 paper in January, 1866, and prices ranged high accordingly in that money; this year (1877) the volume of money is little over $800,000,000, and prices are low accordingly." False assertions such as this could be cited in great number.

These theories, supported by facts which did not exist, formed what may be called the erroneous intellectual basis of greenbackism. But this was only the basis of the movement; in order that the skeleton might be clothed with flesh and blood and quickened into life, the emotions of the people must be touched, and this point was not neglected. No flights of oratory were wanting. On this line the two Senators of the great State of Illinois may be quoted:

"If our country is not good, then our currency is not good; if our Government is good our currency is good, and with a Government.

so endeared to the people of this land that they would spend billions upon billions of money and rivers and rivers of the best blood to preserve it, I ask you where the man is who will stand up here and curse it and say it is not responsible for the circulation of the country."

"Sir, I maintain for that legal-tender, today, that it is as good as gold. The honor of this nation is pledged for its redemption in gold. We will never repudiate a dollar or a dime of it. Sir, it has upon it the impress of the best faith of this nation. It is the money sealed and sanctified with the best blood of the Republic. . . . . It is a noble currency, a grand trophy of the war, and held dear in the heart of every American citizen."

h) The belief in an arbitrary shifting of values by every variation in the volume of notes led to another view less extensively held, no doubt, but yet of serious effect, and that was that Congress and the Administration were in the corrupt control of the financial interests against the producing or borrowing interests. As the farmer brooded over his misfortunes and was stung with the feeling of injustice in addition to the realization of loss; as the conviction became more and more impressed that he had not only been betrayed by his representatives, but deliberately robbed of the result of his labor and the patrimony of his children, he was ready to believe the demagogue who could explain it all and point out the remedy. This psychological stress was made the more tense and socially effective by that concentration of dissatisfaction in agricultural and rural environment which characterized the West and South.

The "Inflation Bill of 1873" is one of the most entertaining debates in the Annals of Congress. Objectively speaking, it comprises seventeen hundred columns of the Congressional Record and occupied almost the entire attention of both Houses during the long session of the Congress beginning December 1. In this voluminous compendium we have gathered together what is probably the most interesting body of economic theory, from the point of view of the curio-hunter, that American public records afford. The advocates of inflation were in the majority-the vote in the House was 140 to 102; in the Senate, 29 to 24-and the bill to increase the circulation of greenbacks to $400,000,000 failed to become law only by the veto of President Grant. The quotations above are taken almost entirely from this discussion, as illustrating the views of the most representative

body of men available. It may be observed that the inflationist advocates were not confined to either of the great parties nor to any section.

As a direct party issue greenbackism proved to be a weaker movement than did the non-partisan measure of 1873-74. The temporary relief of more prosperous times and the strength of the old party ties resulted in practical abandonment after a single decade of struggle. The element of the discontented and aggrieved found a more promising field for their powers of agitation in another movement which was already taking form; for while the silver movement offered the essential benefits which greenbackism sought, it held out certain important tactical advantages.

107. THE FRONTIER FARMER AND GREENBACKISM1 BY CLYDE O. RUGGLES

It was ultimately in the agricultural west that greenbackism found its strongest support. The conclusions of a study of the greenback movement in two typical states, Iowa and Wisconsin, may be summarized as follows:

The prosperous decade of 1860 to 1870 encouraged many to engage in farming and to go into debt; that the falling prices of the decade 1870 to 1880 made it impossible for many to pay these debts, especially since the subsidy policy of the Homestead Law had enticed a class with but very slender means to enter agriculture; that the counties which sustained a slightly higher percentage of mortgage to farm value gave more votes to the Greenback party; that the land subsidy policy also brought about a greater production of the principal grains than could be disposed of at a profit; that the Greenback party was organized and attained its greatest strength in both States during the years of greatest agricultural depression and lost its hold on the voter with the return of better times; that the party was strongest in that State which was more dependent upon agriculture, and in the section of both States that were more frontier in character; and, finally, that in the "Greenback counties" there was but little stress upon manufacturing, diversified farming, and the dairy, and a marked concentration upon grain farming.

'Adapted from "The Economic Basis of the Greenback Movement in Iowa and Wisconsin," Proceedings of Mississippi Valley Historical Association (Omaha), VI (1913), 765.