Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1875-09-02
Some of Congressman kelley's Errors.

Mr. 3.65 Kelley claims to pursue the in
ductive method in political economy; that
is, he claims to proceed upon the basis of
facts-to collect all attainable facts relating
to any given question, observe them in
their true relations, and thence draw his
conclusions. Now observe how he treats
facts. In his Indianapolis speech he as
serted that SIS, 000,00o of the notes OF the
Bank of England were irredeemable; or,
what is the same thing, that the bank is
only required to redeem its issues IN excess
of S75,000,000. This is not true. The
bank is required to redeem IN coin all Of
its notes that may be presented, TO the last
pound. Its issues to the amount OF 49,
100000, or S75, 100000, are secured by
Government bonds, much as our bank
notes are secured, and it is bound to pro-
tect all its issues beyond that sum by an
equal amount of specie in Its vaults; but
the portion secured by bonds, which Mr.
Kelley says are irredeemable, is, In fact,
as truly redeemable as the rest. Again,
Mr.. Kelley asserted that England
was compelled to suspend payment
periodically" evidently meaning that
the banks were compelled to sus-
pend payment of their notes. This again
IS not true. Since the passage of the
Bank act of 1914, limiting bank issues both
IN respect to the amount and denomina-
tons of notes, the notes have never been
discredited in the least, though payments
to depositors have several times been Sus-
pended. In other words, the paper cur
rency Of England has always been up to
the specie standard ever since the passage
of the act of 1914, no matter what disasters
may have befallen the business communi-
ty. And again, Mr.. Kelley attributes the
sufferings of the English people in 1922 10
what he calls an Insane policy of specie
! resumption" ignoring the fact that these
sutferings began long before that policy
was inaugurated, and when deprecated
notes were " the money Of the realm" and
that they have experienced no sutferings
at all to be compared with those since they
have been firmly planted on the specie
basis. Once more, Mr. Kelley reviewed
the banking history of this country for the
purpose OF showing the fallacy of the
specie basis, ignoring the fact that ex.
cept for brief intervals, we have
always had the rag basis, and never
the specie basis, in this country.
And once more, Mr. Kelley magnified
the bond greenback currency system, we'll
knowing that it had never been tried any,
! where on the face of the globe, and there
| lore that there was not one solitary fact to
! be adduced in its support. And once
more, Mr.. Kelley attributed the late fail
ures in England to an expansion of bank
credits in consequence of the inadequacy
of the currency, without bringing one sim
gle fact to show that the bank credits
would have been any less proportionately
had the volume of currency been ten times
as great And, finally, Mr.. Kelley ignored
entirely the experience of countries using
irredeemable paper as compared with the
experience of other countries using hard
money-not paper nominally convertible
into hard money, but hard money itself.
The experience of California during and
since our crisis of 1878 has been stand
ing fact condemning irredeemable paper
money and demonstrating the safety and
sufficiency Of hard money. AS long as
Mr.. Kelley misstates, perverts and ig-
nores facts after this fashion he will have
no claim to a place among inductive
philosophers.-Chtcago Times.