Returning the Nation to a Gold Standard: Make America “Grant” Again
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Copper and oil prices drifted down last week, while gold prices rose slightly. This is a hint that global economic activity may be slowing down, while economic uncertainty is rising. One way or another, the tea leaves are aligning in favor of gold buyers and precious metal mining companies. Meanwhile, today is Presidents’ Day, a federal holiday.
Those above a certain age might recall when we celebrated Abraham Lincoln’s birthday on Feb. 12, every year; and George Washington’s birthday every Feb. 22. Then, in 1971, Congress passed the National Holiday Act, to create three-day weekends for federal employees. (Seriously; you can check it out CLICK HERE). And voila, we now have Presidents’ Day.
I mention this because, the other night, I had the pleasure of speaking with the nation’s 18th president, Ulysses Grant. We discussed returning the country to a gold standard, and therein lies a tale.
Ulysses S. Grant, Civil War General and U.S. President, 1869 – 1877
Okay; yes, I know. President Grant died in 1885. He’s buried in Grant’s Tomb – aka the General Grant National Memorial – in New York. Actually, he’s not “buried;” the deceased Grant lies entombed, in an above-ground sarcophagus.
Still, I had the next-best thing to meeting the real man. I spent an evening with Grant re-enactor and impressionist, Kenneth J. Serfass of Gettysburg, Pennsylvania. Since 2009, Serfass – a retired U.S. Marine – has traveled across the nation, offering tens of thousands of people a living history lesson about the life and times of Ulysses Grant. He’s an impressive scholar of the mid-19th Century historical figure.
Byron King and Ken Serfass, U.S. Grant reenactor and historian.
“When you mention President Grant to many people,” said Serfass, “a common reaction is, ‘Oh, his presidency was marred by scandal.’ But when you ask them to name any scandals, they usually cannot,” he stated.
Per Serfass, Grant was an honest and ethical man, victimized by “fake news,” back in his day, which portrayed him as something of a scoundrel. Still, in the end, over 1.5 million mourners turned out for Grant’s funeral. Sad to say, Grant had the misfortune to live and preside in dishonest and unethical times, unlike today… Oh, wait.
For our purposes in the Daily Reckoning, Mr. Serfass (Pres. Grant) and I discussed Grant’s first inaugural address (Click HERE to read it in full), delivered in 1869, just after he was sworn in as president.
“The country having just emerged from a great rebellion,” said Grant, “A great debt has been contracted in securing to us and our posterity the Union. The payment of this, principal and interest, as well as the return to a specie basis as soon as it can be accomplished without material detriment to the debtor class or to the country at large, must be provided for.”
When Grant used the word “specie,” he meant gold. In essence, Grant told the American people that the days of easy-money, paper “greenbacks,” used to finance the Civil War, were over. It was time to return to a gold standard, and pay down the war debt.
“To protect the national honor,” declared Grant in 1869, “every dollar of Government indebtedness should be paid in gold.”
One cannot say it more clearly. “Paid in gold.”
Then, Grant added, in his address, “Let it be understood that no repudiator of one farthing of our public debt will be trusted in public place, and it will go far toward strengthening a credit which ought to be the best in the world, and will ultimately enable us to replace the debt with bonds bearing less interest than we now pay.”
Clearly, Grant understood the concept of national finance, and was aware that a strong dollar would help push down interest rates, and lower long-term government borrowing costs.
In his speech, Grant focused on one critical source of national wealth, the mining industry. He stated that, “it looks as though Providence had bestowed upon us a strongbox in the precious metals locked up in the sterile mountains of the far West, and which we are now forging the key to unlock, to meet the very contingency that is now upon us.”
Mine ore, extract gold, pay down debt and create a strong nation. That was Grant’s essential set of goals, at the outset of his presidency. During his two terms in office, Grant made impressive moves to implement his vision. Among other things:
- Grant’s Treasury recalled greenbacks, installed a nationwide, gold-based currency and paid down significant national debt.
- Under Grant, Congress passed the General Mining Act of 1872, to promote mineral exploration and development across the then-vast frontier regions of the nation. This law is still on the books, after 145 years.
- Grant supported the scientific exploration of the U.S. West, by continuing the “40th Parallel” Survey. Plus, he established the national Weather Bureau (now called the national Weather Service) in 1870, reorganized the Department of the Interior to deal with vast, new areas of federal land ownership, and set up the U.S. Geological Survey just before leaving office, in 1879.
It’s fair to say that much of today’s federal support for science has roots (history book featured HERE) in the presidency of U.S. Grant. Meanwhile, Grant’s return to gold-backed currency, and his support for mining in the years after the Civil War, set up the nation for decades of industrial growth, leading to a preeminent level of global power.
There’s much else to discuss about President Grant, and his tenure in the White House, but time and space are limited. I’ll leave you, however, with the closing remarks of Grant at his first inaugural address:
“In conclusion, I ask patient forbearance one toward another throughout the land, and a determined effort on the part of every citizen to do his share toward cementing a happy union; and I ask the prayers of the nation to Almighty God in behalf of this consummation.”
Indeed! Perhaps we may still Make America “Grant” Again!
Regards,
Byron King
for the Daily Reckoning
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