The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1867-12-10


| of redemption together with large amount
| of subsequent issues which had denrcciated
were taken up, partly in Bank of Austria
| notes, and partly by conversion into bank
stock at the rate of forty cents on the dollar
This disposed of the original issue at the rate
| OF eight cents on the dollar.
| Russia tried the experiment, and issued gov
ernment notes in making disbursements,
whlch, at hrst, while the amount was small,
circulated at par But the '.fatal faclity was
| fatal here as elsewhere. The process went on
and the paper deprecated until the silver rou-
Die, which is the money of account in Russia,
| ana worth seyenty-tive cents of our money
| was worth four paper roubles In the wear
| 1910 this paper money amounted to seven INN
| dred million roubles, or S5250O0OOO The
| evils Of this deprecated currency continued
varied slightly by temporary expedients, until
the Emperor, by imperial manifesto, July /
1883, ordained cash payments by making the
| paper III circulation convertible into the notes
| OF the Commercial Bank of st. Petersburg,
at the rate OF about twenty-five cents on the
| dollar
The terrible experiments of France with her
| revolutionary dSstgnats and n,dnddts, are too
| familiar to require recital here. They ran
| their brief career with an mpetuous force
that soon exhausted itself; and they are re-
| lnembered only as evidences Of the mad
lengths to which human folly can go.
England, at the beginning of the present
century, engaged in expensive wars on the
continent, legalzed suspension of specie
payments aud placed her sole reliance upon
the issues of the Bank of England. Freed
from the liability to redeem on demand, paper
money rapidly increased in volume, and as
rapidly decreased in value-declining to such
an extent that it was estimated that the gov
ernment contracted debt OF E420OO0,OOO,
in order to realize f260O0OOOO. With stur-
dy good sense, however, that did credit to THEN
national character, the English people set
themselves to work to retrace their steps, and,
after years OF struggling and suffering, the
Bank of England again resumed specie pay
ment, but not until the paper currency had
been reduced by the withdrawal of E43, 49,
978.
The ability of this government to redeem
its outstanding issues is beyond question.
The government has levied u contribution a
little in excess of the ability of the people to
carry; but they have had confidence in the
discretion and integrity of the national cOun-
ellis. They have believed that the issue of
these notes would not be allowed to exceed
the amount absolutely necessary. But, if
this faith should be put to the test by a de-
parture from the ayowed policy established
by CongreSs-that is, by new issues of legal
tenders-the public wovd have no guaranty
against future and unlimited exercise of the
power; and faith in the ability of the govern
| ment would decline just i'll proportion to the
| abuse of its power TO emit legal tender notes.
The advocates of currency composed exclu-
| sively OF government paper, and that in aug
| mented volume, cannot claim even the merit
| of originality. The experiment has been tried
over and over again, with but one result: the
paper goes down until it becomes so nearly
worthless that it is taken out of circulation.
There is no good reason to believe that il
would fare any better now On the contrary,
the experience OF the last five years in this
country is but the counterpart Of the earlier
stages of the experiment in other countries and
in other times*
There is but one point yet remaining for
consideration: the mooted question whether
At,Ax
the amount required TO do the business of the
country.
The circulation of the country has consisted
OF q mixed currency, composed of paper and
COIN, IN such proportions that, theoretically at
least, the one should always be convertible
into the other Ifthis theory could be practi-
cably realized, il the paper could always be
converted into coin on demand, mixed cur
rency would be the most perfect medium of
exchange that could be devised, and the paper
portion OF IL would never depreciate. This is
the great desideratum.
The perfect opposite ofthis, the poorest sys-
tenn that can be devised, is q paper currency
inconyertible aud irredeemabe. The per-
feet currency will always adapt itself exactly
to the service required OF it; and just in pro-
portion to the cOnveftibility of currency
will it adapt itself to the wants of trade. 1t is
the stortuue of an irredeemable currency to
be subject to no known laws inherent in the
natural order OF things capable of regulating
iIo NOluuit. IOul Wnlle IL Is subject 10 no SELL
acting law in this respect, there are certain
tests or indices which infallibly betray its
abundance its excess over the legitimate
demands OF commerce; the principal of which,
and the only one necessary to notice in this
connection, Is its inability to perform its filnc-
tions in accordance with its promise; that il to
say, a paper dollar, under these circumstances,
will not buy q dollars worth-it depreciates
in value. This is called rise in prices; but
the truth is it is fall iu currency. And that
IL nrnciSpV the difftaulfv With 10
day; there is too much of it. It is incon-
vertible; it is irredeemable. The farmer gets
more of it for his produce; but he pays just as
much more in proportion for hissugar, his cof
fee, his clothing and his labor; so he gains
nothing. Apparently getting high price for
his wheat. he takes his pay in paper worth sew
enty-two cents on the dollar.
The appreciation in the value OF this paper,
then, would not damage the producer, or any
other class in the community, but would sim
ply bring the nominal sums involved in ex-
changes more nearly to correspond with the
actual values exchanged. 1.-THE farmer should
sell his bushei of wheat for one dollar in gold,
he would realize the same value as though h.
should sell it for one dollar and forty-five cents
in currency; for he can sell his gOl dollar for
the latter sum in paper. So that, as paper
money .approximates in value to coin, the NOM
lnal price OF produce declines but the actual
value would remain unchanged.
Judging of the present volume of paper
currency by the high prices of every commodi-
ty estimated in currency, it is evident that it
is much in excess OF the actual needs of the
country. ls..
Boast as we may of having established
new standard of value of our own, "independ-
ent of other nations," peculiarly American"
and 'pre-eminently adapted to the develop
ment OF our material resources" it is neverthe-
less an incontrovertible fact that we have not,
and cannot, cut loose from the recognized
standard of the world. Disguise it as we may
gold has b; EN-, and continues to be the mea-
sureiof value; and sooner or later it will vindi-
cate its sovereignty, The paper money OF the
United States THAT furnished by the Govern
ment, together with that furnished by the
banks amounts to S6C5 600, 900, q currency ex-
clusively of paper, more than sufficient for all
our wants. The coin which, before the war
constituted more than half our mixed curren-
cy, has been driven from circulation by paper
money. There is no room for it now, its place
having been supplied by the interior and cheap
er article; but it will come again when wanted
The Director of the United States mint
at Philadelphia, in 1861, estimated
the amoani OF gold in the country TO
Product OF gold, 1861 to 1867, All 5000
Imports from 1862 to 1867, gold and sill q
yer, as, ,933,5S7
Total 765, 5,253,5s7
Deduct exports from 1862 TO
Esiln.ated circu alton in Cal
itornia and otaer gold-pro-
ducing States, 60 000, 900
te - Si2i s2O,i75
Balance, 34y3.4t2
Allow for errors in estimates &c., As, ,4s3,sl2
And we still have $500, 600, COO
of gold and silver in the country waiting to lie
called into active service. Give these millions
their place. Make room for them by calling in
the legal-tender notes, the great disturbing
element of our currency, and the most expen-
sive debt the Government has incurred-grad-
ually if you please, but surely. Enforce rigid
ly the redemption of national bank notes. Re-
tain for the federal government supervision
and control of the currency of the country
through the national banks, and we NAV yet
realize the great desideratum safe, uniform
currency, convertible into coin at the will of
the holder.
There is Lot single example on record Of T. e
power OF ere sing money out OF cheap materials hay
ing been exercised by sovereign State for any length
of time, or through any of public difficulty,
without having been abused. *t' The t'mpta
ton to sub tiiuts issues FIR taxation, 10 re ieye the
wants of the treasury, - becomes too strong to
be resisted. The career of debasement once entered
upon, IL has no pause till there Is scarcely any value
left to be DESTROY ed.-FfuierfOH on the RegUIdfioH
or Carrencies, y. 81.
There has never been government yet, OF the
many which have issued irredeem able paper VIII ch
had the wisdom and rmncss to resist for any great
length of time the strong temptation {, over issues.
WheL once the press is set to work, 1t must
work with livlier sreed; because just in the ratio
oil the depreciation is the greater amount required
-Terry's Elements QfI'o,iticat Ecoaomy.
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