Charles Francis Adams, Jr., to his father
Quincy, November 18, 1864
The management of our finances now seems to me not only the greatest but the most inviting field for usefulness which this country affords. Are you acquainted with the present financial temper of the country? Do you know what the present condition of our finances is? My opinion is n’t worth much, but the subject is one which interests me and, as I have lots of time, I’ll write my impressions. In the first place, our people are now taxed to death, not for revenue, but for currency. A dollar represents fifty cents in goods. Bitter experience has taught them that it is better to pay an enormous tax for revenue and more for currency, than only heavy taxes for revenue and half their incomes for currency. I have one thousand dollars income. I could better pay $250 for revenue if a dollar was worth a hundred cents, than nothing at all with gold at 230. This an intelligent people begins to see. In other words a nation has at last learned that paper-money is not wealth and that, after a certain point, the best way to raise revenue is to put your hand in your pocket and pull out the coin. I want to see some bold, obstinate, common-sensed financier just follow out those principles and proceed to regulate our Treasury. If such a one would now take his stand and declare that he would have a dollar a dollar and not borrow another cent, but carry on the war by taxes and taxes only; that he would not ruin the nation by discounting its paper with 7.3 interest at sixty per cent off; that he might tax us half our incomes, but he would make the other half gold; that he would not borrow another dollar now except at par — such a man might now be forced out of office, but his day would come and the country would return to him sooner or later. I think he would carry it through now. They say we now raise $600,000,000 a year. If so, this in gold would carry on the war. The trouble is we pay it out in depreciated currency for every munition of war. Prices once broken down to gold rates, our present taxes apparently would suffice. I believe the country would cheerfully pay the sum necessary to take the Treasury out of the market as a borrower, and if we contracted no more loans the greenback currency would surely rise in value without another effort of the Government. We should indeed have to face a currency contraction and commercial crisis; but surely that would be better now than presently and amid the strain of war could most readily be met and overcome.
This last election has given me a new and almost unbounded faith in the faculty of a free and intelligent people to manage their own affairs. It was conducted with so much temper and moderation, the issues were so fully discussed and, on the successful side, so wholly without clap-trap and buncomb, it has convinced me that our people, to come to correct conclusions, need only full and able discussions, time to think and honest and clear thinkers to guide. The popular mind is now ripe for a correct solution of our financial questions. Up to within a short time people had a sort of blind belief in what Mill calls “currency juggles “; they thought that certain men could manufacture wealth out of printed paper; that national expenditure, credit and debt, in some mysterious way, differed from individual debt, credit and expenditure, and was subject to other and then unknown laws. A fearful expenditure and bitter experience have now made them expect some humbug in all that and to me it seems that they only need to have correct principles bluntly stated to redeem at once past blunders and present troubles. A year ago they were not ready for this and the man who had proposed it would have failed to convince. Now any man who does it will win everlasting honor.
The country begins to suspect that a nation no more than a man can submit to unlimited shaves on his paper and that after a certain point it is true economy to return to cash payments and that to do this you must spend only your income. The Government in this war has never had faith enough in the virtue and intelligence of the people. They have been afraid of their own measures and the people are to-day more willing to honor drafts and taxes than the Government is to impose them. The result has been most disastrous. To carry on this war we need not more than 400,000 men and $600,000,000 a year really furnished. By our timid system of drafts, with their quotas, and credits, and balances, and one year men and all that trash, and our ruinous system of loans and paper money, we have terrified the people by calling on them in one year for 1,000,000 men and we have made the war cost them $1,200,000,000, all because our rulers either don’t know how or dare not tell the truth.
I hope the Government now will come out fair and square and say: “This war costs now so much in men and so much in money as we now carry it on: as it might be carried on it would cost so much. Currency juggles and draft juggles are only swindles. Men and money are the sinews of war. Raised directly, they cost so much; raised indirectly, so much. All that cost in any case must come from you, but that difference is what you must pay if you want to cheat yourself into a pleasing idea that the cost does n’t come out of you but out of somebody else. These are the principles on which finances and military strength depend and three years demonstrate their truth. Now choose ye!” These things need to be brought before the people and the Cabinet should do it, for the President, we know, is not equal to it. What a superb thing it would be to have some man at the head of affairs who could now lead this people, in the midst of the trial and excitement of war, back to correct principles; leading them of their own free will, and simply by pointing out to them their errors as proven by results in their own recent experience.
