The herald and mail. [volume] (Columbia, Tenn.) 1873-188?, 1875-09-17
PAPER VERSUS COIN.


Currencg Ga estion-Shon0 Presentation of the
| Anti -BuLIionist Yiel0 of the Finances The
Crime and Curse of ForcibEe Specie Resunlp p
The following letter from Wendell
| Phillips has been addressed to Mr..
Eugene Beebe. secretary of the Legal
Tender Club, New York. It gives in
| forcible language that gentleman's views
on the delicate question of a circulating
medium, and will be read with interest
by all who have money or want it:
AUGUST %, 1875.
Mr.. Eugene Beebe, Secretary of the Legal
Tender Club:
DEAR SIK-I appreciate the great i'm
portance of your agitation to prevent
further contraction of the currency, and
am sorry shall not be able to attend
your meeting in September. Tt seems
TO me there are but two questions to be
considered touching the currency
First-Upon what basis shall il rest
Second-HoE much of it shall we
havep
A long time ago there might have
been third-of what shall it be made,
gold and silver or paper? But the ex-
perience of business men long ago an
swered that inquiry and settled it be-
yond recall, that throughout christen-
dom the currency must be paper. 1t is
idle to talk to day of a specie basis.
That gentle hallucination has been en-
couraged to quiet timid men and delude
the masses. But the thing itself has not
really existed for fifty or a hundred
years. Great Britain, where, if any
where, such a basis could be main
tanned, has to-day so cents of coin to
800 cf paper. Patterson. Science of
Finance. PIP. 5, 6, 27, %, 81, 50. Edin-
burg, 1863.
Any individual may have that Afty
cents provided he does not need it, and
provided there is no special reason why
business absolutely requires that he
should have that fifty cents of coin at
that time, he cannot have it. A specie
basis of fifty cents coin to support 500
paper It reminds me of that Irish
six bottle Fa2er who always sat down to
drink Wa$small bit of strawberry
at the b6btSm of his wine glass, and
kept it there during the evening-''it
gave so fine flavor to the wine +
Doubtless that fifty cents coin gives
strong specie flavor to the vast system
of British paper, and makes Bull feel
warm and comfortable.
Political economy settles very few
points by theorizing. Now and then
experience decides a question, and it
passes into accepted and undeniable
truth. In this way business experience
has decided that currency, in civilized
and commercial nations must rest on
credit and consist of paper. Thus ex-
perience answers our first question, the
currency does rest and must rest on
credit. Whose shall that credit be?
Shall it be the credit of banks and their
customers, or the credit of the nation
This question also experience has
answered. Before the war we had
banks resting each one on its own
credit. We all remember thu result.
The bills of bank ceased generally to
be current hundred miles from its
own counter. You lost ten per cent. in
changing those of the south and west
for eastern bills; and Horace Greeley
denuredly told the committee who paid
him handful of western bills, ''if con-
venient I should much prefer we'll
executed counterfeit on some eastern
bank. What makes our National bills
good, and equally good, everywhere to-
day? The nation stands behind them.
Such notes pass everywhere at the
same value, because the nation guaran-
tees them. All the note currency we
have rests on national credit, directly
or indirectly. No man can give reason
why they should not all rest directly
on national credit why all bank bills
should not be withdrawn and legal
tenders supply their place.
In building a house you do not put
platform between the house and its
foundation. Certainly not. Your walls
rest directly on your foundation. To-
day tue nation pays the banks 500, ,00O,-
900 or more to allow them to play the
useless part of standing between it (the
nation) and its own currency. DIR.
Franklin's hero, who asked his victim to
pay for heating the poker, was most
reasonable person and Solomon COM
pared with ourselves in the matter. L
have heard of an incompetent man put
under guardianship and obliged to pay
trustees literally for taking care of his
property, but 1 never heard of one put
under guardianship and paying guar
dian most literally and then obliged to
do all his own business besides, which
is exactly our case. We furnish the
credit that supports these bank bills
and then We pay the banks for using
that credit.
Bagehot, the highest authority in
England, says the public takes bank of
England bills without inquiry or hesi-
tation, because it knows in any emer-
gency the government will sustain the
the bank. Here our bills pass because
the government is distinctly pledged to
do so. The two great commercial CEN
ters have drifted into currency based,
in fact, on government credit, and they
deliberately accept the situation.
Our first question (On what shall our
currency rest p is fully answered by
facts. In commercial nations it rests,
and must rest, on government credit.
Second-How much currency shall
we have?
No single man, officer or institution
can decide or ever did decide this ques-
tion. Currency made up of bank bills,
deposits, notes, bills of exchange, etc.,
is like any other article of manufacture
we make as much of it as we need.
The business of country, when not
interferred with, always settles the
amount of its currency. Business
creates, everywhere and at all times,
lust such and so much currency as it
needs. Banks and Secretaries of Treas
uries imagine they determine the
amount of the currency. As well
might Old Probability claim that he de-
termined the weather. He and they only
record what mightier forces do. Hats,
shoes, wagons, rails, clothes, cotton,
wheat-one year we want more, the
Lext less-Who decides ? The dealers
in the article and the users of it. Does
anybody advise going back to other
days, and having some board Of wise
acres decide how much wheat shall be
planted and how much cotton, how
many loaves and wagons made. No
such dreamer obtrudes himself on the
public. But thousands clamor for al
lowing bank Directors, and them alone,
to settle the amount of the currency.
And they are allowed more control than
any other agency. The New York city
banks alone increased the currency
So, 600, 600 in one week of March, 1875.
This aristocracy in the money manu-
facture is an odious monopoly, alien to
our institutions and harmful to our
prosperity. What should we say if five
hundred men. and such friends as they
chose. were allowed to plant wheat and
mine iron, while every one else was for