The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1846-07-18
From Facts for the People,
Letter from the Hon. Edmund
Burke, on the Currency.
WASHINGTON, April 90, 1916.

", OF the currency is just doubled in
amount. In other words, if the volume
of currency amounting this year to
Sio0,o0o,0oO should, next year, be
doubled by adding TO it $lO0,0o0,O00
of paper, making its volume S9oo,Ooo,-
900. The effect would be, all circum-
stances remaining the same, TO increase
in The same ratio the prices Of all kinds
ofproperty. The price ola horse worth
$50 would be increased to 500, and
bushel of wheat from 81 to 50, hereal
intriasac ralue remaining precisely the
same.
II would have the same effect upon
all descriptions of property, even upon
hard money; because after the infusion
Of paper, il would take just two silver
dollars 10 buy as much other property
as one would before have purchased
Thus this infusion Of paper adds not
one particle 10 the volume of the ,ohole
amount Of currency, while it Just doubles
its nominal quantity. ltis just like ad-
ding glass OF water to glass Of BRAN
dy. The quantity, or volume, is dou,
bled, but the amount of true spirit, or
the real value, remains precisely the
same.
To apply these principles. Suppose
A., before the currency Is inflated by
the infusion Of paper, or bank note cur
rency, contracts to pay B. 500 the
next year, in neat stock, or in wheat.
When the contract is entered into, it is
made with reference to the existing
state of things, the amount of currency
in circulation, and the present value Of
property. If oxen Of a certain quality
are valued at $50 peryoke, A. expects
to deliver, and B. expects to receive,
Two yokes OF oxen for the debt. If the
debt is to be paid in wheat, and wheat
when the contract is made, is valued
at S. per bushel, a. expects to deliver,
and B. expects to receive, 100 bushels
for his debt. This, IN substance, is the
contract betmeea The parties.
But, when the day of payment ar
rives, the currency has been expanded;
Just doubled in amount, by the addi-
ton of Sloo,ooo,ooo of paper to the
SlO0,Ooo,ooO Of specie. The prices OF
all kinds Of property have accordingly
risen pro raia, that is, just doubled. A
yoke of oxen is now nominally worth
SlOO, and bushel of wheat is worth
50. But the contract bet,ceem the par
ties remain precisely the same.
A. now pays his debt with one yoke
OF oxen instead Of two, or with so bush
els of wheat instead Of 100, contrary to
The cypress understanding Of The parties
uhen The contract ,oaS made. And thus
B. is cheated out of one halt ofhis debt
through the instrumentality of paper
money, and the dishonesty of A. in
avaiing himsefo the advantage which
an unsound and corrupt currency pre-
sentcd to him. In this case the cred
tor suffers.
But, suppose A. promised $lO0 when
the currency was at its highest state Of
expansion, and oxen were worth Sl0o
per yoke, and wheat 50 per bushel. In
this case the substance of the contract
is, that A. shall pay B. one yoke Of
oxen or so bushels of wheat for his
debt. But. when the contraction takes
.place. and the volume of currency is
reduced one half. it takes two yokes of
oxen, or 100 bushels of wheat, to pay
the debt, when, at the time it was con-
tracted, both parties expected but one
yoke OF oxen, or SO bushels of wheat,
would pay it. In this instance the
debtor suffers.
These examples illustrate the prn-
ciples contended for, and thus it appears,
that paper money, BY its constant and
nere,' ceasing .f@ctuatiqns in nominal
quantity, is just rs constantly and nev-
er ceaSing Interfering ,Oith, and unSe!-
ting, The real terms and obligations of
contracts.
And thus will the farmer and work
ing man see how he is ever the victim
of paper money. 1t deprives him ofhis
natural right to fix the prices of his
property, and the wages Of his labor,
and proves to be to him more mex
orable robber than the pirate or high
wayman.
Twice, during its history, has the
paper system Of this country gone
through the process OF expansion and
contract ction-of intumescence and col
lapse-each time producing the very
evils, and many more, which have
above described as flowing from the
use OF paper money. In 1911, the
whole amount of currency in circula-
ton, according to the best authority,
was $45.ooo,0oO. An immense ex.
pansion took place from taat period to
1916, when the amount in circulation
was S1ls,00o,ooo. At that period an
explosion took place which flied the
cnnntru with diSfrosS and desnln ton. |