Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1876-01-13
Why Has the Greenback ANY Value?

L ANSWER that there are two reasons
1or the continued value of the greenback.
The first is, that everything which circu-
lates as money in community has a Ger
tain value merely in virtue of its useful
ness as currency. Even the value of gold
IS much greater than it would be but for
us usefulness as money. There are GER
tain conditions under which it is theoreti-
cally possible for unredeemed bills to be
on a par with gold These conditions,
which 1t IS very important to bear in mind,
are:
l. Ihatthey shall actually pass current,
and be received as "bankable funds"
:. That their quantity shall be so small
that they are insufficient to form the entire
circulating medium, so that some gold
has still to be used The universal expe-
rlence OF all nations and people who have
ever tried it is, that as soon as the cur
rency is issued in such quantities as en-.
urely to dlsplace gold, it begins to depre
ciate-that is, gold is at premium.
This is the secret of the non-deprecia-
ton of the bills Of the Bank of France.
during the last few years while specie
payments were suspended. There were
not enough notes in Paris to transact It's
business, so that gold had constantine be
used in part.
NOW, although our greenbacks have
been issued in greater amount than was
necessary for business, as is conclusively
proved by their depreciation, yet the
amount has been limited by law. 1t has
been still further limited by the fact that
the revenues of the Government have ex-
ceeded Its expenditures, so that large
quantity of the greenbacks have not been
in actual circulation. And so long as the
total issue of greenbacks is strictly limited
to its present amount there is no danger
of their total loss of value.
The second reason for the value of the
greenback is that there has been more OF
less expectation of its being redeemed
some time within the life of the present
gen Grafton. Though no one has seen ex-
actly how specie payments were going to
be brought about, the general business
sentiment of the country has been that we
must reach them IN some way. The green
backs have always been counted as part of
the public debt, which proceeding implies
an obligation to redeem.
To these two reasons, and to no others
are we to attribute the fact that our green
backs have not gone the way of all pre-
vious systems of irredeemable paper mon
ey. The reader must carefully notice that
neither OF these reasons is based On the
fact that neither of these reasons is based
on the fact that the greenbacks are issued
by great Government. The unredeemed
paper of France was issued, not by the
Government, but by bank yet, as we
have seen, it was more successful than
our Government paper. 1t is not the
party which issues, but its quantity and the
prospect Of its redemption which determine
its value. Indeed, bank paper is, under
such circumstances, far less liable TO de
probation than Government paper, for
the reason that if the public is determined
the bank can always be made to pay up,
while the Government cannot. The case
is just like your preference for the paper
of a small house, which must pay, over
that OF a firm so rich and powerful that
1t is above paying.
You see at once that if the policy of the
inflationists were permanently inaugural
ed both of the reasons for the value of the
greenback would be knocked from under
it, and it would rapidly go the way of the
Continental currency, and every other
system Of Government paper money that
has ever been tried. With no intention
to redeem III coin, a note would be mere
piece of paper; and if issued in such
quantities as would be demanded, al
though everyone might call them dol
lars" their purchasing power would di-
minish without limit.-Prof. s. Neaocona6,
On Hasper's Weekly.