Delaware gazette. [volume] (Delaware, Ohio) 1855-1886, 1868-07-24
The eoasequenees D. .Paper Inaation.

/ The Consequences OF. Paper Imitation.
The ruinous results of an inflated pa
per currency were signally illustrated
in the experience of the colonies during
| the revolutionary war. The whole
some lesson thus conveyed shOuId not
be lost upon the American people, and
as the adoption of schemes equally pre-
gnant with mischief as now being stren-
uously urged this Is a good time to re-
call it. We quote from Perry's PoIiti-
cal Economy, a late and able work.
(Editors Gazette.
In 1880 Massachusetts, set the first ex-
ample, which was soon Initiated all over
| the country, of issuing bills of credit, a
government paper made receivable in
taxes, and afterward made legal tender
I in payment of ordinary debts. At first
these bills or treasury notes, were is
sued not to furnish a currency, but
merely as a convenient way of antici-
pating the taxes, that is, to realize them
at the beginning of the year, while they
would be gradually paid in the course
of the year. They were like the En-
g1ish exchequer- bills except that they
bore no interest, Afterwards scheme
originating in South Carolina came in
TO general favor, namely, to open loan
which should furnish at once capital for
borrowers, and a currency for the peo-
pie, and TIE interest was to be n source
of revenue to the colony.
But in whatever way issued, whether
in the way of loan to borrowers, or In
anticipation of the taxes, the essential
and Inherent vice of such irr6deemable
paper was soon every where apparent.
There was a constant tendency TO over
issue, and consequently a necessary de-
meHt yet, of all those which have at
tempted the issue of inconvertible pa
per, which hSd prudence and firmness
enough to resist for any great length of
time the temptation to issue such paper
in excess It always has deprecated
from the same cause and it probably al
ways VIII. So 1t was, ,at any rate, in these
colonies thus early in our history. The
bills of credit were issued profusely,
aud deprecated indefinitely. In 1749
Massachusetts had found paper money
so utterly wanting as a measure of val
ne, that she determined to abandon it
altogether. She redeemed all her out
standing bills in cash at the current
rate at which they were then eXehang-
ing.
The demands of the old French war,
and the various attempts TO conquer
Canada, led, on the colonies except
Massachusetts 10 new and large issues
of bills of credit, which deprecated of
course. Soon after the CONQUEST Of Cam
ada the British Parliament passed an
act prohibiting to all the colonies the
issue of bills Of credit but from this re-
straint the Revolution set them free;
and, to provide means for the desperate
struggle with the mother country there
was no resource but in paper money.
In April, 1775, Massachusetts, which
had discussed paper money for more
than a quarter of a century, revived its
use by authorizing the issue Of colonial
bills to the amount OF GlO0,0O0, in sums
small enough to circulate as currency;
and on the 23d of June following the
Continental Congress began its fiscal
operations by voting to emit two mill
lions Of dollars in continental bills of
credit. In July another million was
authorized to be issued, and the liabili-
ty for the three millions was distribus.
ted among the colonies in the ratio Of
their supposed number of inhabitants I;
the bills to be redeemed in four annual
instalments5 to commence at the END Of
four years. In November an addition
al three millions was ordered, to be ap-
portioned and redeemed like the form
er, only the redemption was to begin at
the end of eight years. In the follow
ing February came four millions more,
one million of which was in bills Of q
less denomination than one dollar.--
Eighteen months had elapsed, and
twenty millions of continental paper
had been authorized, besides large local
issues, especially in New England, be-
fore any very considerable signs of de-
probation made their appearance, It
soon, however, became evident that the
only way to stop the depreciation
would be to stop the issues and Con-
gress made very persistent but very iIl-
ehectual attempts to substitute for
further issues system of loans on pa
per bearing interest. At the same time
I
credit by resolution that their bills
sought to pass current in all payments
trade, and dealings and be deemed
equal in value to the same nominal
sums in Spanish dollars" :" and that all
persons refusing to take them ought to
be considered "enemies of the United
States," upon whom it was recon-
mended to the local authorities to in
fiict " "forfeitures and other penRlties.'
The States were also advised 10 make
those bills a legal te7Stier, to make pro-
vision for the redemption of the first six
millions, to avoid the further emission
of their own local bills, and to take
measures to draw IN those already out.
The loan system falling Congress re-
luctantly had recourse to the press aUiteh
printed the paper money. and the next
ten millions increased the depreciation
This issue was authorized In February,
I777, and in August came two millions ore,
] EAs
lion in December, making thirty-fou mil
lions in all. At the beginning Of the year
the bills were nearly at par and at It's close
| the first half of the next year tWenty-three
millions and a half were added to the al
ready superabundant mass, and the depre-
| citation became alarming. Forty millions
more were added in the last half of the year,
and the depreciation at the beinning Of l779
| amounted in the North TO six In the South
i to eight for one. Before that year was half
gone under the influence OF large addi-
I TONS he n
one. The paper still Elgtltg tender an pay
naellt Of debts; and Notwithstanding the con
tte sltdeTlgS Of the poor, and the gains o. Gte
aTfttE and WseTtlp.tfOts, Congress felt obliged
| phistries, to refer the existing depreciation
| mainly to ''tUd11t Of confidence" !" and TO tGttd
| cannot make to itself wings and fly away !
/ 1t remains with US, it viii not fOrsake u.s. It
Is always rea$ ~ nG iSI IhS III a y,
| dnd itP' The rest OF the story is soon told.
Before the end of the year the remainder OF
vain hope of stopping the depreciation
| Congress had beforehand announced as the
| press was allowed to rest. The value of the
! money was then about thirty TO one. The
! States were now advised to repeal all laws
making the bills legal tender, and the
scheme of the "neW tenor" was devised by
| which the old bills were to be drawn in at
| the rate OF forty for one, and funded in gov
ernment bonds bearing interest This was
the nishing blow and the paper soon drop
| ped ont Of circulation altogether. Just be-
fore the Revolutionary army in camp at
Newberg had combined to refuse it, and tts
circulation was wholly stopped, it e1ehang-
ed for cash at the rate of one thousand for
one. One thousand for one IS 80 per cent.
below par, and the prices Of commodities
were as ridieulously high as the value oil
the paper was pitifully low. A man in New
England or New York would pay fiVe hun
dred dollars for his dinner, and never ask
the landlord to reduce the bill. I heard the
story In my childhood Of certain gentle
man well known in those parts, who stufied
his sulky box with continental bills and
| then sailed forth to purchase COW!
KEEPING FURs IN SUMMER,-Ladies ies
are often anxious abont keeping furs
free from moths during the summer
/ nn~Rrvauur fe talf that ia YBafnnzs