CHAPTER VIII.

POSTAL SAVINGS-BANKS.

In connection with this question of foreign exchange, I may say also, that the government should establish savings-banks in the postoffices, the deposits therein being guaranteed by the United States, and its exchanges or money-orders to be current, not only all over the Union, but over all the countries joining the postal union established by the Geneva postal congress before alluded to. It will be seen at once what an effect such a measure would have towards the establishment of an international exchange business, the main point objected to my system of an absolute national money. With our greenbacks, men could buy their postal drafts at any post-office here, and this postal draft, or whatever it might be called hereafter, would pass current and be promptly paid throughout all the countries belonging to the postal union. These drafts would amount to a very large sum per year, and the usual premium on them would pay double all the expenses of the mail service of the United States, and furnish domestic as well as foreign exchange at each of the thirty-seven thousand five hundred post-offices to all who might need it. No more beneficial financial arrangement could be devised for a perfectly safe exchange. In Great Britain this system, though as yet only local and in its infancy, has proved to be very safe and successful. When the government takes your savings on deposit, you will be very sure of getting them back. The dishonesty of many of the public officers and bankers will not affect this question of absolute security of the post office deposits and exchanges; for when the government becomes bankrupt, every individual member of the nation is bankrupted. The whole plan rests, it is true, on the basis of coöperation; but whereas all other previously devised coöperative associations are within, and subject to the regulations of a national government, the coöperation proposed by me is effected by that national government itself, and its success can rise or fall with that national government alone. Should our national existence ever be wiped out, of course all its coöperative features would also perish; but can any better reason be advanced by which to induce every member of the coöperative nationality to risk his all for the maintenance of the national existence.?

To some extent this international money-exchange system has

already been established throughout the States belonging to the postal union, which now includes nearly all the States of Europe and America, all of Australia, and the greater part of Asia. That is, at any of the larger cities in the States of that union you can buy a postal order for a limited amount, which may be cashed at any other money post-office in the union. A postal order bought in St. Louis, for instance, will be paid in Paris, in Melbourne, in Vienna, or in Yeddo, and vice versa. At the end of every year there is a settlement made of these money-orders between the several post-office departments of the union. In other words, the postal orders are then "cleared." Now, this is precisely the idea put forward in the first edition of "Liberty and Law," seven years ago.

As yet the system is but in its infancy, but what vast development it has already reached will appear from the following:

For the fiscal year ending June 30, 1878, the post-office department of the United States issued postal orders in the sum of $85,000,000. The domestic money postal-orders issued amounted to $81,442,364, the number of these orders being 5,613,117.

The international postal orders — that branch of the business having but just gone into effect— amounted, in issue, to $2,047,696.86, nd were drawn upon the following countries:

On the other hand, there were paid on international postal orders —

Amount.

Leaving the United States in debt to those countries at the end of that year $616,828.95, to be settled in the usual manner between the respective post-office departments of those countries. This certainly is a very encouraging exhibit for the first year's trial of this new system. But to perfect the scheme, postal savings-banks should be established over all the postal union, authorized to issue, in place of the present postal orders, drafts or bills of exchange, which would be honored throughout the whole postal union. This would deal the death-blow to that most extortionate of all self-created monopolies, the private banker's foreign exchange business.

CONCLUDING REMARKS.

Let me, in conclusion, summarize the main advantages of such a system of absolute money for the United States, as I have sketched in the foregoing, perhaps a little more at length than would be warranted by the general character of this work, were it not for the supreme importance of the money question in that period of human development upon which we are now entering:

1. It would unite the people of the United States by ties even stronger than those of historical tradition and nationality.

2. It would at the same time abolish a dangerous centralization of financial power as it now exists in the Federal Congress, and restore absolute freedom of banking to the people of the several States.

3. It would free us from financial leading-strings of foreign countries, and thus make us what now we merely pretend to be, altogether free and independent nation.

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4. It would extinguish our national debt and prevent the incurrence of any new public debt in the future.

5. It would relieve us from the main burden of our taxation, the interest on our bonds, — and thus make possible the abolition of the internal revenue and tariff systems, and the introduction of absolute free-trade.

6. It would furnish us with a uniform and elastic legal-tender money, subject to no fluctuation or change of value, and yet accommodating itself always to the requirements of the country.

7. It would relieve the present insufficiency of our money circulation, and then lower the rate of interest and compel the employment of the money in aiding the development of our industries.

8. It would abolish the cumbersome, expensive, and unstable specie

money, and substitute in its place the safest, most convenient, and economical money-medium possible.

With all these advantages so clearly pleading in favor of the adoption of my system, may I not ask for it the thorough, impartial consideration of the people of this country, of its bankers, and of our representatives in Congress, to whom the vast responsibility of deciding the future financial fate of this country, for weal or woe, has been intrusted? We are rapidly approaching the most momentous crisis in the history of our internal development. A continuance of our present uncertain money-system, with its utter instability and inadequateness for the needs of the country, is, however, impossible. A change must take place. We need a financial constitution, if I may coin the phrase, as fixed and permanent as the political constitution which our ancestors made for us. We need it - at once; and could a more fitting time for the inauguration of our financial freedom be conceived than the present? We have reëstablished our political nationality on a wider and safer basis than that upon which it rested in the early days of our republic; let us now also establish our financial nationality, and thus complete the work which was begun a hundred years ago by the mighty men of the American Revolution, in the spirit which animated them, and in the form which they pointed out for us.

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MONEY-APPENDIX.

CHAPTER III.

RELATION OF ABSOLUTE MONEY TO COIN.

[From "Absolute Money," a New System of National Finance. By Britton A. Hill. St. Louis. 1875.]

It is my firm conviction, that if the United States government were to create such a paper-money system, and make it exclusively legaltender in the United States, gold would soon lose its present fictitious value and fall below par in price, just as silver fell below par in Germany, when the government of the German Empire had stripped off from it its legal-tender prerogative.

If this seems absurd to some of my readers, let them look at the financial condition of China or East India. Gold is not taken in either country as money; indeed, six hundred millions of the civilized population of the globe refuse to accept gold as money. Merchants, who took £20,000 in gold to the Bank of Calcutta in 1864, when money was scarce, could not get a single bank-note or rupee advanced upon it. "The price of gold sunk so low," says the Bombay Times of that year, "that it could have been reshipped to London at three per cent profit." And simply for the reason, that gold was not a legal-tender in India.

There can be no doubt that gold would soon share the same fate in the United States, if my scheme of absolute money were adopted. For, with such an actual national legal-tender money, of what use would gold be except in the arts, and, in part, for foreign exchange? It is estimated that there are about $300,000,000 of gold coin now in the United States, hoarded in stockings, bank-safes, and the Federal treasury. It is true that for awhile after the passage of an act creating absolute money, coin might still be hoarded; but as the