Part 1

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.

The superficial student of history cares only for the results of the evolution of nations—for the fact that Sesostris was the greatest of Egyptian kings; or that Semiramis rose by her military sagacity from the rank of a mean official’s wife to be, first, the Queen of Ninas, and afterward, to be the Assyrian Queen, who should march an army of three millions men across the Indus to conquer the Indian King. Running down the course of events, he traces the rise and fall of nations—after Assyria then Egypt, next Persia, Greece, Rome and then the Dark Ages, out of whose womb was evolved modern Europe; and, lastly, the birth, development, struggle and recovery of the most remarkable nation which has yet arisen in the world.

Behind these facts, which are but results, lie the real motor powers of history; and they are deeper, broader and more important than is that which they evolve. There is an external and an internal phase to everything existent in the world. Up to this generation the external has apparently borne the more prominent part in determining what should be next. But now the analytic age has begun, wherein facts do not suffice; wherein new systems, new theories, new philosophies and even new religions are constructed, not by an examination of the errors of what has been, but by the discovery and application of the principles, the powers, which underlie those errors.

Heretofore there has been no inquiry made by the rulers of the people into the general principles of government. It was sufficient that there was a government maintained, the governors caring for little but the power to compel the people to do their bidding. But it is beginning to dawn upon the minds of those who have something more than a selfish interest in humanity that there is a science of government; aye, even that there is a science of society: and such minds are endeavoring by the deepest researches to discover the principles of these sciences.

In our government, the principle of individual rights is theoretically held, though in its application government still interferes with those rights. The legitimate functions of a government, based upon the rights of every individual over whom its power is exercised, are limited to the duties that will best subserve and protect the interests of individuals. The proper understanding and practice of these functions is the most important thing for a people to arrive at, but, having arrived at this as the basis of all the relations of the people, the scientific construction of the various departments of the complete superstructure which is to cover all the public interests of all the people, as well as to maintain their private interests intact, can be begun.

After the general principles of government are properly formulated in Constitutions and vitality given them by laws, a correct, a scientific financial system stands next in importance. If a country have a true system of government, and do not have a true system of finance, it can never attain to any permanent prosperity. Literally speaking, finance is a part of government; since, in organizing it, means for its support are among the first considerations. Hence it is plain, if there are principles of government, so must there also be principles of finance.

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.

The various systems of which use has been made were simply experimental, devised for politic reasons, as the best methods to meet the exigencies of the times in which they were required. Instance the Greenback, the necessity for which was such as to shake the nation to its very centre, and to fill the minds of all patriots with a dread foreboding.

If there have been no scientific money systems in vogue, and it now comes out that the world has arrived at that degree of advancement wherein policy should give way to principles, even in finance, there can be nothing gained by going back to review the errors, failures and fallacies of the past. Nothing valuable can be gained by wading through the almost innumerable statistics which have accumulated to a sufficiently great extent to bewilder the most comprehensive intellects. Having for ten years been deeply engaged in studying the principles of government, I learned that no system of government could be perfect unless its financial department was perfected; therefore I have frequently endeavored to solve the financial problems which statistics propose, but invariably failed to learn anything that even promised to look well as a basis for a new and improved system, to say nothing of its promises in operation.

The conclusion was inevitable, that there have been no acknowledged or even known, fundamental principles of finance operating in any of the many systems of the many nations, and that the so-called money of the world is not now, nor ever was, money, in the scientific sense of that term.

All the statistics, failures and errors of the past, with which the history of money abounds, being of no value, must be utterly ignored in any inquiry which proposes to predicate a natural and scientific money, as distinguished from arbitrary inventions, devised to meet the various exigencies of nations in their growth, prime and decay. And any person who proposes to teach finance, or a new system, by arraying before you the evidences of the past, contained in figures amounting to billions of dollars, simply proposes to try another experiment, to culminate in another failure.

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.

In order to intelligently discuss and arrive at legitimate conclusions regarding the question of money, it should be first determined just what is to be involved in the discussion; for around this, as around all other general things, there has been such a mass of rubbish and extraneous matter aggregated that the main question is always in danger of being lost sight of, unless this be first removed and the real issue left clearly exposed.

Most of the confusion which follows the attempts to solve the money question arises out of the fact that the same words in the mouths of different people do not mean the same things, or that different words are used by different people to mean the same thing. If there are two words in common use to represent similar objects, but which, upon close analysis, do not represent precisely the same thing, it is better that one of them be discarded. It is necessary, therefore, to settle, prior to the beginning of this argument, precisely what the several terms do mean which are prominently in use in connection with the money question. It is, perhaps, near the truth to say that this settlement is the argument. Very few persons have any well-defined comprehension of what is the real significance of the terms gold, money, currency, intrinsic value and wealth. If these words are analyzed, what do they scientifically represent?

Gold is a product of the earth only to be originally obtained by labor and expense, and both practically and scientifically bears like relations to labor that all other things do which are produced by labor; and none other. But there has been an importance attached to gold which has not been accorded to any other product of labor. It has been coined and called money, because it was coined, and by custom and common acceptance made an arbitrary standard of value, which none of its qualities warrant when subjected to analysis, as will be shortly shown.

Gold bears the same relation to real money that a religious theory bears to real religion, which theory, when comprehended by the intellect of the people, loses its value as a substitute for real religion; but which, until comprehension comes, it is better to have than to have none at all. So also with gold. It has in theory been considered as money; but when a true money comes to be comprehended, it will lose its value as a substitute therefor, and sink to its proper sphere among the other products of labor.

It is altogether probable that gold was the very best substitute for money during that part of the world’s evolution wherein people were guided and controlled by policy and before principles were recognized as that which should govern, let their action lead where it might. As the world is now beginning to act from principle, for the sake of the truth, so also must they now begin to formulate the principle of money for the sake of the principle.

Wealth is whatever is produced by labor which adds to the comforts, the happiness or the life of man; and everything that does this, either directly or indirectly, has intrinsic value—that is, has the capacity to bless mankind.

Wealth may, and should, be divided into two kinds, namely, permanent wealth and transitory wealth.

Permanent wealth consists of all those products of labor which are not themselves transferable into life, comfort or happiness, but which may at all times be exchanged for that which is thus transferable into that which can be used to continue life. Gold, silver and precious stones are among the best illustrations there are of permanent wealth.