The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1874-07-08
From the Atianti, Moathly.
a Modern Financial Utopia.


From an excellent article in the May number
Of the AE1Htic, written by David A. Wells, giving
the experience Of Texas with paper money, We
copy the following paragraphs, which carry les
son to statesmen in every country. We would
gladly insert the whole article, but our space is
too limited. Ed. GAEErrR
And here commences by far the most vaIua-
bic Of all the lessons deducible from the study Of
the fiscal experience of the Republic Of Texas
a lesson, moreover, exceptionally interesting,
from the circumstance that we find in it show.
ing and demonstration that the working and eff.
feet of a system Of irredeemabe paper money is
one and the same, whether the field of its inau-
enee be rich, deusely populated old country ike
Austria or Great Britain, or disturbed thinly
populated community, with little accumulated
capital and occupying, as it were, the very Dor
der line between barbarism and civilization.
The first noticeable and most interesting fact
Connected with the history Of these Texan treas
ury notes is that although the credit OF Texas at
the time Of their issue was so bad that foreign
loan could not be negotiated and the audited
drafts on the treasury had so far deprecated as
to have but nominal value, and that Of less than
fifteen cents on the dollar, yet the notes them
selves, though practically unreieemabIe, were
when first issued at par, or nearly par, with spe-
Gle, and furthermore were kept so for months, or
until their Issue exceeded in amount half mil
lion OF dollars The explanation Of this curious
I phenomenon is, that the people Of Texas at the
time Of the authorization of these treasury notes,
had practically no circulating medium for effect
ing exchanges, or none that was really worthy Of
the name; and although community can get
along in its business without currency, as it car
without horses aud carts ships and steam.engines,
all alike iastrumentalities for efecting the in
terchange Of commodities,-there is no commu-
nifty that viii dispense with any of these agencies
if it can help it. With the outbreak Of the revo-
Luton the hammered money and the eagle money
as already stated. soon disappeared With the
failure Of the banks Of the United States 10 1887.
the notes Of the banking institutions Of the south
western States, which had come in Ike food
and had supplied to Texas the void occasioued by
the disappearance Of its specie circulation, be-
or fractional notes Of persons and firms, although
continued, was BY law forbidden. The want of
some medium that should have one value, and
would regulate prices and facilitate exchanges, F.
was therefore much felt; and when the govern
ment gave the people the best medium they
could, threw around it all the guarantees that it /
was in their power to supply, and issued no more
OF the medium than was necessary to meet /
specific want, the people in turn accorded to the .
medium value proportional to the work it per-
formed, or the necessity it supplied. The first
issue Of notes, in addition to pledge of govern
meut faith to receive them in payment Of all pub
lie dues and to redeem them as soon as there was
anything to redeem them with, carried also q
promise Of Ten per cent interest q rate easily
calculated, and which offered an indueemeut for
boarding the notes to such Texans as could af-
ford it and had also faith in their ultimate pay
ment- The whole revenue from customs was also
devoted to sustaining the credit of these treasury
notes. and about this time the laws for ralsing a
revenue from imports began to be effective the
gross revenue accruing from the customs for the
quarter ending September 80, 1887, having about
sixty thousand dollars
The Texans we're, moreover, exceedingly wise
IN their day and generation in another matter
The original treasury notes, although intended to
serve Is currency, were nevertheless, from the
fact that they carried ten per cent. interest, in
reality 3 species Of national bond = and being
issued in round sums Of small amounts, as low
even as one dollar, they we're taken up as invest
ueuts, Or specialized in by persons Of very small
means, who never regarded themselves in any
sense Is capitalists Very considerable sums thus
iound their way into the United States and were
held there, and even the negroes Of
New Orleans we're enabled to enjoy the luxury
1f specializing IN foreign securities. It's also Gu
-ous to recall that at the time Of tie formation
'f the syndicate in Is70-Is71. for the purpose
Of funding the national debt Of the United States
It lower rate Of interest than SIX per cent,
his very sane plan that worked so successfully
Z Texas IN 1887 vas brought forward and urged
before the committees Of Congress with great il
genuity and ability, BY the then head Of the Euro
lean banking firm Of BoEIss Brothers, as 3 coz
iition precedent and essential to placing perma-
lsutly large amount Of Federal securities among
he masses il Europe. at very low rate Of inter-
s. According to Mr.. Gouge, Tens treasury notes
'ontn1ed to be At par or nearly At par with specie
lutil their amount exceeded half million Of dol
ars- If We take the population Of Texas at the
inc as about Jorty thousand. and suppose that !
ne fifth Of the entire issus Of half million vas
-oar1ad n Hoasz1 RI Tr.o tLs T--s..5 c,-s-- [
ben the result affords yer! striking and curious
affirmation Of the theory held by many Of the
ct informed bankers aud economists, that n :
Tsfsge Of about fsa doE1s Pr a, lita i the a.