The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-04-11

ever have happened with them In two years IL
had fallen TO dollars OF paper money for one ia
silver IN three wears 10 four co one nine months
more 1t fell to ten to one ana "a Tue sS nlon
lowing that Is TO say, by september. IL" " uao
fallen 10 - .
TWENTY DOLLARS IN PAPER FOR ONE IN SILVER.
Congress- alarmed at the consequences wnicn
were TO be appreheDded should they lose this
resource altogether. thought |! necessary 70 make
a vigorous effort 10 stop Its further depreciation
They therefore determined In the nrst place that
their emissions should not exceed 5000 0oO. 900. to
which term they were then nearly arrived; anu
though they knew tnat $ao OF what they were then
one silver dollar would buy, yet they thought that
IL would be worth while TO submit to the sacrifice
or $40 out of $50 II they could thereby stop iurther
depreciation. They therefore published an adore
10 eheir constituents in which they renewed their
original declarations, that this paper money should
REDEEMED AT DOLLAR FOR DOLLAR.
They proved tae ability OF the states to do this.
ana that their nberey would be cheaply bought at
that price. The declaration was lnef1ec tua. NO
man received the money at a better rate. They
they passed resolutions that the Continental money
ought 10 be maintained at its nominal value that
those who should exchange their goods for more
IN Duls than IN specie should be deemed enemies
10 the Liberties OF the United States and should
forfeit the values so exchanged. The Legislatures
OF the various States were. moreover, recon-
mended TO enforce these penalties, to make the
BUS legal tender, 10 provide Tor calling IN and
sinking Iher respective quotas OF the emlss ons.
and lastly, 10 raise by taxation such sums as they
should think required in the then situation OF the
country. This was also Intellectual In six months
tried an experiment OF a different kind. Consider
ing their former Offers to redeem this money at par
BY the refusal shsy 70 take
whole 10 be brought H. declared that 1t should be
redeemed at its present value OF forty for one and
that they would give to the holders new bulls, re-
dnced in their denomination to the sum OF gold
or silver wnich was actually to be paid ior them.
This reduced the nominal sum OF
TIE MASS IN CIRCULATION
to the present worth OF that mass. which was
$4,000, Goa sum not too great Tor the circulation
n hA
would not depreciatc further. as they continued
firm IN their purpose OF emitting no more. This
little Of the money was brought in. il
continued circulate and to deprecate till
I'VE Tor one; and the money circulated from the
French army, being by that time sensibly current
IN ali the states north OF the Potomac, the paper
ceased its circulation altogether In these states.
In Virginia and North Carolina 1t continued year
longer, within which time IL fell to
ONE THOUSAND FOR ONE
and then expired. as it had done In the other
states, without single gr0an. Not murmur
was heard on this occasion among the people. on
the contrary. universal congratulations took place
on their seeing this gigantic mass, whose dissOiu-
ton had threatened commissions which should
SHAKE the infant coniederacy TO its centre, quietly
inferred IN It's grave Foreigners. indeed, VINO did
not ike the natives, feel indulgence Its memory
and fallen IN the moment OF victory. long con-
tlnued loud in their complaints. Many Of them
were persons who had become bankrupt by I'M
skilIul attempts at commerce with America
Justice was ut last done to all by paying what the
paper actually cost them, with interest at six per
cent from the time they received 1t. In deter
mining the latter point Congress acted literally by
admitting easy Proofs ,Sns., o. v.,r.s
1t was found, however, that III all countries
where compulsory government paper Is issued
the metals, even wnen coined. soon are regarded
solely as commodities and are affected equally with
all other commodities by the increased issue OF the
paper currency. AS, therefore, when there is no
check TO the issue OF government paper and ex-
travagant or careless expenditures call Tor In
creased issues, depreciation OF sucn paper neces
sarily ensues and each stage in the depreciation
occasions iurther ISSUE which, in its turn, de-
preciates increases the depreciation; for when
the government perce1ves that 1000 in paper
money will no longer command the same quantity
OF commodities IL needs that 1t would formerly do
but that $1,l00 Is requisite Tor this pur-
pose, 1T IS compelled TO Increase It's issue
OF paper money in this proportion, and this in
creased issue again raising the price OF COM
modltles requires still larger issue. the next
time purchase has to be made. Money OF what
ever 1t IS composed, whether of metal or paper.
Ike every other commodity, depends for its value
on the proportion between it and the commodities
for which It Is exchanged. II tins proportion Is
altered deranged the value OF the money Will be
altered II while the quantity OF the money re-
mains the same the quantities OF commodities be
diminished. the money must necessarily bear
larger proportion to them than 1t previously did,
and consequently Its power to purchase them will
modlties continue stationary, the amount Of the
circulating medium Is increased the same result
Will happen-Lhat Is, the power OF the currency to
purchase Will be diminished, and the currency
therefore. as FAR as 1t s considered in relation TO
EFFECTS IN THE COLONIES.
During the Revolutionary War several OF the
va@na n mItaG be 20 ann ag @ naa
but 1t was well understood great depreciation
would follow. Massachusetts IN the same year
issued notes for ~ and upwards, but the PrOvin-
cal Congress was soon alter obliged to reduce the
denominations to sums ranging from twenty to SIX
shlllings. When TINS money was used or the pay
ment OF debts, as 1T commonly was, from necessity
well as choice, the loss OF the depreciation lell
solely upon the creditor class; and in this way
m a O w amid q cradIt ro-
ceived not more than nall, or perhaps a fourth,
or yet less of what was Justly due them. such
mischief. 1t tended to unsettle mems notions OF
right and wrong; 1t famularlzed them to injustice,
and II ned a out temptations TO perpetrate It. An
throughout the community, and in this way an
undue thirst Tor gam was engendered as well as a
greater disregard ior the means OF gratifying 1t,
and careful observers could perceive these effects
long after their original cause ceased to operate.
THE PRESENT CURRENCY.
When 1t found in 1862 that the amounts
raised by loans, by taxation and from other
sources were insufficient TO meet the expenses OF
suDdulng the rebellion, bill was introduced
authorizing the issue for the first time OIL legal
tender notes. The amount specified was
protracted and able, Some OF the leading repub
lican members opposed Its passage 4s uncOnstitu-
cursor OF prollhc brood of promises, not one OF
which would be redeemed in the constitutional
standard OF the country: 1t was condemned as a
measure not blessed by one sound precedent and
damned by ALL The constitution, 1t was held, pro-
hibited Congress from making anything but gold
ana sivera tender IN payment OF debts. 1t gave
power 10 emit bills OF credit, but tue power to
make them legal tender was nowhere given,
and Mr.. Roscoe ConSLng, OF this State, declared
that iii not III the constitution there was end
OF ALL
THE OTHER SIDE.
On the other hand 1t was admitted that gold and
silver were a legal tender, but 1t was conended
That there was nothing in the constitution
pressly declaring anything legal tender. The
States are prohibited from making anything but
gold and silver legal tender; but as there Is 81.
lence on this point In reference to the United
States, 1t was argued that the matter was lett dis
cretonary with Congress. Congress had from
time to time changed the alloy OF gold and silver
com. 1t possessed the power, winch was first
exercised III 1892. to make such metals legal ten
der in payment OF debts II, IN the meantime,
Congress again changes the alloy, de-
basing coin TO one-thlrd OF its value, 1t
was asked If that coin so debased could be
made legal tender. II sucn were the case 1t
would be as much u violation OF the constitution
TO make paper legal tender. The making OF
the proposed issue OF Sl500J0.00O a legal tender
might stu be avoided II the Willingness manifested
by the people generally, by railroad companies and