Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1868-02-05
The Law If

The Law of GreenbackS.
In the debate in the House, on jan
uary the 9Th, Mr.. Blaine, OF Maine,
called attention to an act of Congress
passed on the 30th o June, 1864, which
placed a prohibition upon any subse-
quent issue of legal tenders, making
that prohibition q part OF the terms and
conditions of the last loan negotiated
by the government. An examination
of the statutes satisfies us that Mr..
Blaine is right. The first statute au-
thorizine an issue of United States
notes was the act of February 18th,
1862, which authorized the issue o
$50, 900, 900, in legal tenders, $4,000
600 of which were TO be used in redeem
ing a like amount of demand Treasury
notes, issued in July, 1861.
On the 1lth, of July, 1862, Congress
authorized an additional issue Of $50,
900. 900, one-third of which was to be
reserved to pay temporary loans.
On the Sd of March, 1868, a further
issue of $50, 000, 900 United States
notes, for the purpose of converting
outstanding Treasury notes, was author
lied, and also an additional issue of
$50, 900, 900 (if Necessary to pay the
army and navy, and other creditors of
the government
This gradual increase of the amount
of legal-tender notes was reluctantly
consented to by Congress. Nothing
but an inevitable necessity could have
forced Congress into a measure which
both Fessenden and Pencleton charac-
terized as fraught with terrible evils to
the countryside evils of an inconyer-
tible and deprecated paper currency.
Both political parties saw the danger
to both public and private credit result
ing from an unlimited issue OF legal
tenders ; and in order TO guard against
it, Congress pledged its faith to the ns-
tional creditors-that is, to everybody
who held either bonds or greengacks-
that there should be no increase of
these notes, in these words:
"Prouided, That the total amount of
of bonds and Treasury notes authorized
by the first and second sections of this
act shall not exceed four hundred mil
lions of dollars, in addition to the
amounts heretofore issued nor shall
tie total amount of United States notes issued
or TO be issued eUer exceed four hundred
millions of dollars. and such additional sum
not ereeeding If gmiAiOns Of dollars, as may
Be temporarily required for the redemption
Of temporary loans"
This is the pledge made by Congress
TO all whom it might concern-that
the amount of legal tenders then out
standing $3.50, 900. 0O0j should never
be increased. This was a part of the
contract in the Loan bill of 1864, and
would be held by any court in Christ
endom to be valid and ~irrepeslable.
The logic which denies the obligation
to pay. the holders of the national
bonds any more than they gave. origin
ally for them is as weak as it is dishon-
est. When the government in 1862 g.
As, sought loans to enable it to main
tain its ~existance, the issue OF psper
money at all was understood and pro-
to be a temporary expedient.
It was alleged that, as oon as the war
was ended, a return to specie payments
would take place. The promise of the
government 10 pay had NJ possible
value or significance save in the promis-
edreturn TO specie payments. The ques-
ton therefore, at this time IS, not how
much did the creditor loan the govern
ment in 1868, or '64, but how much did
the government promise to pay him
when the war was oyerf The govern
did not promise topsy g, 500, 900
900 in deprecated paper, because it
had pledged the national faith that
there should never be an issue Of legal
beyond the amount of $3.50,
600. 1000 tho outstanding. 1t is not
a little remarkable that the most
of men in Congress in de-
handing the limitation of the issue of
g~reenbacks, is now the champion and
leader of the party which proposes to
ROB- the whole people, both bondhold-
ers and note-holders, by watering the
currency. The greenbacks now in cir.
culation are in the hands of the whole
rich and poor alike. By far the
portion of 1t is in the hands of
persons Of small means, who exchange
their goods and products and labor for
it, day by day. Every increase in the
amount of an irTedeemable paper cur
rency, reduces the value of the sum
outstanding. If the farmers and labor
ars of the Northwest hold 500, 000, 900
Of legal tenders, and the value of that
money is reduced twenty-five per cent
by additions to its aggregate amount,
do not the holders lose one-fourth of
money-one-fourth of the pro-
ceeds of their productions and of their
To issue i~nconvertible paper
without limit viii not pay the debt (;
it may c~onfscate the interest. but it
will take from the producing classes an
amount far in excess of the interest,
if not equal to the debt itself. The end
of all would be a reputation of the
greenbacks, which would become more
plentiful and pestilent than the locusts
Of Egypt.-ChicGg0 Tribune.