The Cairo bulletin. [volume] (Cairo, Ill.) 1872-1878, 1876-06-27
vxprnvrNCr poN.r PROVE 1T.

gxPERuENCE DON'T PROVE 1T.
The Chicago Times. in an article under
the heading: IAN Old Plan Made New"
makes, with much emphasis, the assei-
ton, that experience has proved that
circulating notcs-notes without interest
cannot be maintained at par with GER
tainty unless they arc redeemable on de-
mand, and not only nominally hut ac-
tually redeemablc.''
Experience has not proved any such
thing; but experience has proved that
irredeemable paper-absolutely irrcdeem-
able paper-may be. under certain condi-
tions. kept at par with gold
The Times may reply. that
if this is irne, then we are likely to realize
the "wagon.way through the air of
Smith and Ricudo-a paper circulation
without metallic base. This We do not
assert. although even this is to all ap-
pcarances possible: hut still we do assert
that experience has not proved what the
Times asserts it has proved: that circu-
lating notes without interest. cannot be
maintained at par with certainty unless
they are redeemable upon demand.
Take in proof of this. denial the cX-
ample OF France. On the 18th of July.
1870, now nearly six years ago,
the war between France and
Germany was commenced. II was ended
on the 10th of May, 1871. The circula-
ton of the Bank of France. at the time
the war began, was S25l 100000 and the
specie in hand S229 900 900, about ninety
per cent. In August, 1870, the bank sus-
pended specie payments. and its notes
were made legal-iender. At the end Of
the war. within year after the suspen
sion of specie payments, the bank had n
circulation of SIZE, 0,000 - and a
specie reserve of only Sll0, 900, 900, about
twenty-five per cent. On November 10.
1873, the circulation was greatest, being
1902 DOC, 900, and the spcie reserve $780,
100000, or about twcnty-iour per cent.
In November 1871, gold, as compared
with these notes. was at premium OF
two and one-half per cent, but shortly
after declined to par, and has remained
there ever since. In November when the
gold premium was two and one-half per
cent, the circulation had reached S4G0
001 900. On the 1st of February, 1872.
the circulation exceeded $3.50, 0e0. 900 and
the premium on gold was only one and
one-half per cent. In very
short time after this the circu-
lation was increased to $Gi0000, 900
and the premium on gold disappeared
entirely, since which time the legal-tend
er notes of the bank OF France. bearing
no interest, and not redeemablc either in
fact or nominally, have been on pal
with gold, and may remain so. if appear
ances are to be trusted-if experience il
to be believed-until the crack of doom
We will not undertake to eX.
plain this mysterious fact. ant
do not urge it in defense O
the financial heresies of our financial anti
precious metal lunatics. We offer it a
one of the peculiar facts in financial his
tory, and as flat contradiction of tn
assertion that par paper must be pape
like the long-ago notes and circulatin.
receipts Of the Banks of Venice and Am
sterdam,-paper backed by gol
reserve equal TO its face-pape
not only nominally but actuall
redeemable. In our apprehension, pa
per OF the Venice-Amsterdan
kind cannot be obtained in this year @
grace, 1876; and, lift could, circulating
medium like that OF France would b
preferable. Such circulating medium
we might have il the financial coIl
idiots would cease to praise Venice.Am
sterdam paper as the only paper fit fol
circulating medium, and the anti-coii
fools would discontinue their clamor fol
paper nnbacked by gold and silver
Lavish mo.iey-no money. This
might be done by pcrfecting The
system that has the approval of all the
best English and French economists-a
system OF mixed currency-paper
supported by reserves of coin be.
hind il or backed by the credit of the ma.