The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1875-12-25
How Can Paper Money Increase the
Wealth of a Nation7
BY REV. JOHN rwELLs, NJ. A., ENGLAND.
Continued from kIst iceek }

Take another fact as to what paper mon
ey has effected ON a smaller scale in NOR,
recent times :-
The States Of Guernsey, having deter
mined to build a meat market, voted "a,
OOO To defray the cost The notes wer,
guaranteed by the whole of the property
Of the Island, said to be worth four mill.
Ions. These notes did not bear any inter
eat, nor were they convertible INTO the
precious metals They wer. tokens, not
possessing any intrinsic value, but only
that conventional or representative value
which they received from the authority
Of the States by which they were issued.
They were the symbols Of the real money
of the Island They were worthless To
any other community than Guernsey, and
therefore, there was no inducement TO
their expectation. Consequently they
remained permane ntly in local circulation
for local purposes. They were inscribed
Guernsey Meat Market Notes, and mum
bered from l to 4 900, each note represent
ing Fl of account in the currency of the
Island. They were legal tender by univer-
sal assent. With these notes the States
paid the contractor; and with them he
paid his workmen, and all who supplied
him with materials They were freely
taken by tradesmen for goods, by landlords
for rent, by the authorities for taxes.
" In due season the market was COM
pleted. The butchers stalls. with some
public rooms constructed over them, we're
let for an annual rent Of 440O At the
expiration of the first year Of this tenancy,
the States called in the first batch Of notes,
numbered l to 400, and with the E4O0 of
real money received for rent redeemed the
E4OO of representative money expressed
by the Meat Market Notes At the end
of ten years, all the notes were redeemed
through the application Of ten years rem
tai; and since hat period the Meat Market
has returned a clear annual revenue to the
States, and continues to afford accommo-
datiou, without having cost farthng in
taxes to any inhabitant. -
Can it doubted that, as this able writer
lnfers, the system which enabled the States
of Guerney to build their market, would,
If the restrictions on the issue Of Repre-
sentative Money were removed. develOpe
the resonrces$bf the whole kingdom
Again, take the case of Scotland. as
stated by Sir Walter Scott, in his Nal
Ichl Malagrowther's Letters, to show how
the wealth Of nation is increased by
Paper Money. assume" says lie,
" without hazard of contradiction. that
Banks have existed in Scotland for near
one hundred and twenty years-that they
have tOurished. and the country has flour
ished with them-and that. during the last
fifty years particularly, Provincial Banks,
or branches Of the chartered banks, have
gradually extended themselves IN almost
every Lowland district IN Scotland; that
the notes, and especially the small notes,
which they distribute, entirely supply the
demand for a medium Of currency; and
that the system has so completely expelled
gold from the country Of Scotland, that
you never by any chance espy a guinea
there, unless in the purse of an accidental
stranger, or in the Golfers Of these banks
themselves. THIS is granting the facts of
the case as broadly as can be asked
. 1t is not less unquestionable that the
consequence Of this banking system, as
conducted IN Scotland has been attended
with the greatest advantage to the country.
The facility which 1t has afforded to the
industrious and enterprlsing agriculturlst
OF manufacturer, as well as the trustees OF
the public IN executing national works
has converted Scotland-from peor,
miserable and barren country-into one
where, If nature has done less art and in
dustry have done more than in perhaps
any country III Europe, England herself
not excepted. Through mean of the
credit which this system has afforded, roads
have been made, bridges built and canals
dug, opening up TO reciprocal commuuica-
ton the most seqnestered districts If the
country-manufacture have been estab-
nshed, unequalleo in extent or success
wastes have been converted into prOduc-
tive farms-the productions Of the earth
for human use have been multiplied
twenty fold, while the wealth Of the rich
and the comforts of the poor have been
extended in like proportion. And all this
in country where the rigor of the climate
and the sterihty of the soil seem united 20
set improvement at defiance. Let those
who remember Scotland forty years since
bear witness if | speak the truth or false
hood Sir Walter Scott letters had the
effect Of preventing the withdrawal Of 81
notes from Scotland.
These facts prove that, either on small
scale, as in the instance of the Guernsey
States, or on large scale, as in the case
of the American Colonies,-in an old
| country, as in the case of Scotland, or in a
new one, as in that of America, the Judi
cious application of representative money
paper currency-is attended with the
most beneficial effects to the community.
| Again, Sir A. Allison, the able and in
defatigable historian, bears this testimony
to the power and superiority Of paper
money When sixteen hundred Thousand
men were engaged in active warfare, on
the two sides in Germany and Spain alone,
where nothing could be purchased but by
specie, it is not surprising that gulneas
went where they were so much needed,
and bore 50 high price. In truth, such
was the demand for the precious metals,
owing to that cause, that at length all the
currency of the world. attracted to Ger
many, as a common centre, could not sup
ply it; and by decree on September 30th,
1913. from Peterswaldau, in Germany,
the allied sovereigns issued paper notes,
guaranteed by Russia, Prussia and Eng
| land. which soon passed as cash from
| Kamskatchka to the Rhine, and produced
the currency which brought the war to a
successful issue. There was an instance Of
the manner in which paper circulation,
based on proper security, supports credit,
and supplies the want Of specie at the de
cisive moment Whereas, according t.
the present system, the paper would %
necessity have been contarcted, when the
specie became scsrce-credit would have
been ruined at the critical periods. ai,d thu
uast ornaments of the allies ,eould hare been
dissolved for tcdnt Of funds for thelr sup
port" England in 1915 and lS45, PIP. 76,
~.
And in a recent edition of the history ol
Europe, he gives this additional evidence
of the important advantages which expert
ence has demonstrated to result from a
paper currency. ITO the suspension Of
cash payments by the Act of 1877, and its
power in consequence vested in the Bank
Of England, of expanding its paper circu-
lation, in proportion to the abstraction Of
| tha metallic currenev and the wants of tbs