Benjamnin F. Butler, Butler's Book: Autobiography and Personal Reminiscences of Major-General Benjamin Butler

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$1,000,000,000 of non-interest-bearing debt, and $1,500,000,000 of interest-bearing debt. Now, if that $1,000,000,000 of circulation is too much, i. e., more than is needed for currency, I agree with the gentleman from Maine that it will be depreciated. But what is too much? Too much is more than will be absorbed. as currency in the business of the country. That is to say, if because of an over-issue by the government there is an accumulation of non-interest-bearing notes, greenbacks, in the hands of any man, they are not productive, and he will dispose of them at a discount, if he can do no better, for something that is productive. The only question as to redundancy, therefore, is whether the notes in his hands are worth more for use in his business as currency than they would be to him if invested in a loan to the government. Now, then, I propose that for $300,000,000 of this non-interest-bearing debt we shall issue an interest-bearing loan at once which shall be that exact loan which my friend from Maine yesterday thought would be so absurd — a loan bearing a low rate of interest and convertible and reconvertible into greenbacks at the pleasure of the holder at any day and any hour.

Let us see how such a loan would operate. A man has more money than he wants to use. He with such a loan can go to a public depository, leave his money and take his bond. Then when he wants his money again he goes to the depository, leaves his bond and takes his money for his bond, principal and interest; that is to say, when the non-interest-bearing notes of the United States are worth less to a business man than this bond he will exchange it for this bond; when the notes as currency are worth more to him to use in business or speculation than the investment he will return the bond and take the currency. Thus, without any banks to push out the circulation just when it is not wanted or draw it back just when it is wanted, as the practice now is, we shall have an automatic financial system, self-regulating, or rather regulated by the great law of supply and demand, the best of all regulators. When money is wanted by the business community up to the amount of notes issued by the United States, it will be at once got; when it is not wanted, it will be returned to the government, which being a borrower for a long series of years to come will be glad to take it. There can be no redundancy, because every man will know exactly where to place these non-interest-bearing notes when he has got through with them as money. When money is wanted at the West to move your crops in the fall you take it from the treasury and move the crops; when you get through with the money you take it back to the treasury and get the bonds, in the same manner as when you have got through with your wagons you. put them back in your barns for use next year. Thus the whole monetary system of the