The daily gazette., 1875-09-15
From MsN z gual
Paper Against Gold.
Tho late resting Story oI J0hn Eaw
of LaurisiJwn
lCoNcLrnrD.

Dir, Law ut this period, with pl0mpl
sagacity, perceived that his systcm Of
finance had arrived near the cXDlodine
point, All his efforts hitherto Mad
been directed to decryin tic uscle..
Character OF 4 coin, In mis- he merely
set the example which our papcI-
money retormcrs follow. He ohialned
the passage of laws requiring all debts
and taxes to be paid in the bills OF hig
bank, which paper was put and held
by law at n constant premium over
specie. In every way he had aimed
10 destroy the function of the preci.
Gus metals, and to belittle their use.
lulness and value. The value of the
bank note was legally fixed at five per
cent. above specie, and il was forbid
den To offer or receive payment in
silver or gold, except in very small
sums, while all bills of exchange were
only payable in bank notes. Other
regulations were made for the pur.
pose of creating fluctuations in the
price Of coin SO Us still further to dis.
gust people with its use. In this wav
stock Of the preciou. metals had
been kept in bank. Even tho impor.
tation of gold had been forbidden As a
useless commodity.
But it was at length seen that this
method of hopping the boiler would
not work much longer. Bill holders
still continued to draw the despised
and degraded METAL from the vaults Of
the bank, and quietly ship it out Of
the country in order 10 have it safe.
Although it was held then, as il is
here and now in the case OF the green
backs, that the notes of the ROYAL
hank We're the best money on the
planet, tlcy being secured by the az
gregate wealth of the nation, still
foolish people preferred the worthless
and taboocd coin, and drew steadily
on the banks reserve Of specie. To
prevent, or at least postpone the final
catastrophe, MIR, Law, as we have said
now changes his tactics.
What he found he could not accom-.
plish by indircction, by disabling and
degrading coin. he now undertook to
effect by positive prohibitions directed
to the same cad. A royal decree was
Issued in February, 1920, forbidding
under penalties the possession Of coin
by any person, or community of per.
sons, and also the possession of any
articles OF gold or silver; and in March
following, the use of all gold and sill
yer money in denominations above
one dollar Of our money was pre-.
scribed.
Mr.. Law had now reached the point
at which our reformers start. In mod
ern parlsnce, he had demonctized gold
and silver entirely, and established
pure paper currency which he could,
without more exaggeration than our
paper money men indulge in, dcnomi-
nate the best curreacy on the planet.
The whole volums he hsl put in cir,
culation only aggregated about five
hundred millions Of dollars, OF Just
about double the ordinary circulation
of tho country. Il was issued by ?
Government bank ugdCr royal control,
aud in intimste association with a
Government company Which enjoyed
the privilege of conducting the entire
foreign trade, and wo3 the rccirien,
and controller of tie entire rcyeuue,
OF the nation, ard backed BY rpyul
patronage and Guthoily Iu1 ~
enjoyed all the pateney { Q Aa'.o i.
wealth, with periec, coa'r=l fus-is=
i legi ,latiou. Wit4J Jhese p5gtt- a.l=
ootrntialit,c5 at COT utaut. "ay ,lu'
not III. Law Iusis. tl.-, ttis- .a
wGo wanting ~ m3ae n ?: ..oa#
the best money OF IL t- tl *
sure il vas no .onC-- -e--- liable.
But what Of that? The Go...Al4oat
backed it, received It tor tases, IL .5ss-
it legal tender, and supported !, with
its authority aud credit. II there ever
was paper money scheme fully but.
trlssod all around, and enjoying every
condition of STRENGTH aud perpetuity,
and managed By lnancicr Of the
greatest ability u whom not even
Kelley can aspire u compare, II was
Mr.. Laws.
But all would not avail There was
no real basis 1T bottom except the will
of the sovereign, just as the paper sys-
tenn proposed by our reformers has
none except the will Of our sovercigns
in Congress. The result was it fell
with a gigantic crash, burying all con.
cerned, the guilty and the inna-
cent alike III common ruin.
Mr. Law was q mau of real financial
genius, but :angulne and audacious,
and in every situation, from first to
last, showed that he had vastly more
knowledge and Intelligence on the
whole subject than his modern imita
tons in this country. Yet he was un-
able to oonduct his system with sue
cess, aud failed because it was
essentially vicious and unsound in
theory, and proceeded upon principles
which have never borne the test of
practical experience. Their fallacy
and falsel ood have been over and over
again demonstrated, both in this coun.
try during the colonist and revolution
ary periods, and in France in the reyo.
luton as well as in Laws time, and
mea surably in England itself during
the long period of bank suspension in
that country in the carly part of this
century.
Yet with all these demonstrations of
failure, it is safe to say that the paper
monav thaorins and aynprienppS nj the