The New York herald., 1863-01-26
Frankiin's Foreign Loans and Their
Effect on the Paper Currency.
PRIcns OF GOODS I'm 1880.
TIE RATES OF FOREIGN EXCHANGE.


among tho whirlpoos rocks and qucksandS f rredeem
able paper money, it is at the duty and the interest
Of cvcry citizen to learn something OF the by which
shipwreck and disaster may be avoided. II believe
certain members Of Congress- tho pcris feared all
Imaginary, aud will be moro than the childish
Notions Of dreaming ignorance Others less sanguine
equally honest point to past history and declare that
ruin and bankruptcy will certainly ovestake the whole
country. Neither Of these cxrems viows Is absolutely
true Paper money has usually proved good SER
want, but always bad master In confirmation Of this
have often referred to the English paper money which
during the French sustained its credit and depre
ciatcd on tho less than five per cent We
propose to examine still moro interesting oxampethat
Of the Continental currency issued this country during
tho war OF independence.
1t has long been theashion to deride the
paper money tho worst example Of an irredeomabe
currency which the world has ever seen The history
OF that financial experiment has yet 70 be writ
ten, and the materials for such a history have
to great degree porished. Enough, however,
b extant to show that the Continental currency
was not wholly failure And one OF tho mos,
lusrious statesmen OF the Revolution declared that
the Continental victory was largely due to the Cont
mental money, the memory Of which shosld be
enshrined in the hearts Of tho people that Of cham
pon who vindicated the liberties OF the American colo
nes, and fell gloriousy in the moment Of victory"
We cannot within the limits OF this article attcmpt
moro than brief review OF Of the most interesting
facts relative to this first experiment in Am of
natona, uniform paper currency Still, the country
after the lapse Of three generations Of unexnmped
prosperity. making second trial Of the perilous
financial policy may deduce from former
success some lessons which, r wisely regarded by Con-
gress and the people, may spare Of that public
calamity and private suffering the apprehension Of which
u deprecatng the public stocks enhancing the value
gold spreading gloom aud throughout our com
meroa classes and deranging the business machinery
tho nation.
The Continental money began to be emitted In the
summon OF 1776. Tho war then fairly begun;
OF the reut Of The British Lexington had just arrived
ahs battle OF Bunker Hill had proved the valsr and
endurance Of troops in tho aoe OF the disciplined
Sact and well ocersd European The patriotism
tho people strung to the highest PITCH Washington
hy universal accamation, appointed Commandsrin
0hiof. Regiments OF "mnute men" sprung arms and
Committees OF safety organized throughout the
sountry Tho most resoute answering zeal for liberty
Arrod away the population Every cottage had
h musketeer, and every hillside and valley rssounded
With tho din Of martial preparation Nothing wanted
but mooey.
From taxation no funds whatever could bs raised; for
the farmers could sell their produce commerce was
suppressed tho wheels Of productive industry stood STILL
and whole country impoverished by the troubles
and ncpient anarchy Of the preceding years. There
no alternative but TO borrow and expedent was
Known capable Of raising loans except by Of paper
money Congress had, therefore, to constitute itself
bank Of circulation and 70 issue bills Of credit such as in
lines Of financial pressure the vidua colonies had for
century more been accustomed TO emit In mitep
amounts. The plan opposed in vain. A relentless
necessity forced Its adoption, and there followed
unexpected and immediate for the slenccd
ca.,,Il,p
by the people; for they had long suffered from ii
scarcity Of coin. Passing freely among the SOL
diers and the traders who furnished supplies It
soon received the name Of continental money
both to distinguish II from the bills OF credit Of the ndi
vidue Stes and also because II authorized aud qua
rantoed by the Continental Congress- This embryo
tonal legislature had FIRST met IN Philadelphia about
nine months before-on the 10th September, l774and
under its auspices the which lasted osht year
conducted TO victorious termination, at Of one
hundred and thirty five millions sf dollars Of which, as
shall presently see, almost onefourth was raised by
paper money.
The first issue--on the 23d June I7,5-was for two
millions Of dollars To give value to this govern
ment currency, IL supposed that taxes be inn
posed equal amount OF tho notes. that there
might be certainty OF redemption. II taxation was
laid, the notes, the opinion OF Congress- would be
severed altogether from the basis Of specie They could
not consequently pass current or represent any value
dspensable basis for the paper money upon
but they impossible, consequence OF the
and impoverished state Of the country. How was the
dculty to BE- metz Tho only plan scanned to be for
gress solemnly 70 give an explicit guarantee that
taxes should be laid the return Of peace. The
millions OF dollars 70 be redeemed In four annual
instalments at tho end of four years An
elaborate calculation divided the burhen Of redemption
posed number Of nnsbitanis Before long tho public
voice hailed the experiment a. wonderful financial
umph The paper was found 10 be exchangeable freely
N its nominal vhne for gold and silver coin
This satisfactory result attributed 70 tho happy
device OF sustaining the notes by TAXATION which,
certain the power Of Congress could make t. Accord
ngy ths same sxpsdisnt adopted when on the 2eth
moro found 70 b empty; and absence sf every
oher possible relis second issue Of paper money was
ousi instsnssss for rsdesmins them were to begin IN
sight years Ones moro observed with gratinca.
or .ns 10 oss ~ nas !, no.. tho
money which rom ths arss had summed tho companion
ship paper money wa asssviousy disappearing from
cen. out q ~ country tho papss dollar found 70
Pceses = msch psrshasns power - shs silver dsar.
sss Ssins ruiss1 ~ wsus Of gold and silver which wsrs
the most vA,uxbs kinds OF public wealth, they sup
money vas a present a. rood a. rod and since is use
wm both convencase and necessity, patriotism kops
the bulk Of the people muts and con.enicd.
millions q paper money were in circulation secured BY
the promise of future taxaticn No depreciation what
money reey IN exchange for what he had 70 sell, be.
he knew be could buy with Whatever be wished
10 own. Soon, however, crisis appeared Impecu
niosity, tho chronic maady young repubc sssn
became Troublesome The stern exigcnces ID war AL
mitted Of denial The public e1chequer was srsned
of It's last dollar, aud more paper must be issued
time with fear and trembling; for how could ,hs
pager dollar be sustained without the corner son -
taxation 70 connect II with the basis OF arcrie'
And how could Congress give any pledge OF future axes
when the estimated revenues for twenty years coma
had been already morigagedS II mere farce 10
promise taxation. Hence guarantee OF future rcdcmp
ton could be given. Depreciation, with all its evils was
counted certain But the war, II was snppoaeJ
though only Just begun, was It's cnd. In England
powerful opposition 10 the was organized bon in
Aad out OF Parliament. Peace, II b0ped woutt ena
Die toe country 10 tlms y 'ss"-.r from is exhaust