The Hillsdale standard. [volume] (Hillsdale, Mich.) 1851-1909, 1878-06-11


OF the United States. Their name Import
obligation, and every one OF them bears oi
Its face promise 10 pay n certain sum. Tit
dollar note l. a promise 10 pay dollar. anS
the dollar intended Il the coin dollar Of th'
United states; 4 certain weight Of hneness OF
gold or silver IL. $. Supreme Court
Among all the divergent views on
financial questions, all can not be right
and many must be wrong. We all
agree, however, on one important point,
that the currency of the country should
be the most stable in valne and the
least liable TO sudden increase or de
crease in volume. Such currency gives
comparative steadiness to prices and
certainty to commercial transactions,
without which prosperity is impossible.
Under such currency the man OF bus
mess eau judge closely Of final results
and know where IT is prudent to enter
any given enterprise, even though it's
margin Of pofit may be small. 1t is
where the element OF uncertainty has
been eliminated that capital can afford
to invest itself the lowest living rates,
and il is such conditions that tempt in
yestments giving employment TO the
laboring classes. Where the manage
ment OF the currency is such as TO
create great uncertainty, capital will
only risk itself with the promise OF in
creased profits. Where such venture
succeeds the increased rate Of profit
goes to the Golfers of capital; il il fails,
the capital invested is buried aud lost
On the other hand, when the condi-
tons Of investment are safe, il contin-
ues TO contribute to the development
of the country and the employment OF
labor. A stable currency secures safe
Investments.
The adoption OF a currency which
will most securely guard against great
aud rapid fluctuations IN prices can
Alone give the able, the diligent. the
industrious those advantages which by
every right they should possess over
the scheming idler and reckless specu-
lstor. The man who devotes his whole
time to his business can not rearrange
II day by day 10 mset suddenly chang
ing conditions of prices. He protects
himself 10y charging over on his Gus
toners prices that will cover his risks.
On rapidly rising prices labor is the
last 10 get the benefit OF an advance, so
that his wages are clipped from day 70
day, week by week. The men who
operate on Wall street can take advan-
tage either way. taking advantage Of
both rise and fall. The harvest Is the
same to them.
The several experiments of the race
with paper money furnish but one les
sou: That il should be avoided as a
plague. Overwhelming disaster nd
ruin has followed on every attempt 10
place the business Of a people on q
purely paper currency. Among the
schemes Of this class entitled TO atten-
tios is that Of John Law, an English
man, who could not get his ideas
adopted in his country but who had
somewhat better success in France.
HIS plans and arguments were surpris-
ipgly close to those Of the infationis,s
OF the present day. His favorite theo-
~ was that the power and wealth of +
nation increase in proportion to the
amount OF money circulating therein
and as not even the richest nations had
enough specie TO afford full employ
ment to their Inhabitants, paper money
must be looked 10 10 supply this de-
feet. Have we not heard the same mr.
guments urged early and often on this
hoorY III this be true, let rs see how
this experiment came out.
Law first founded n company in l7l7
under n special grant with exclusive
trading privileges in the province OF
iionisiana, having power over taxes
aud commerce aud being the sole coin
er OF money. The company drew to IT,
self privilege after privilege and final
lv erected itself into the Royal Bank Of
France. It's notes were soon issued T.
the extent OF 1000, 900, 900 livres
backed by the whole power and au-
-thority Of the nation" as the modern
inhatiouist would say. An era Of APP
parent prosperity aud speculative fren-
" began which bcggars description
Men forsook legitimate business 10 en-.
tor the vortex of speculation. The
fluctuations that gave rise to this terri.
bic fever OF speculation enabled the
more shrewd and able operators %
amass large fortunes. They were pro
duciDg nothing, neither adding to the
general wealth. The madness fof
speculation caused the rue de Quin.
cnmpoix TO become the grand resort oi
lobbers. Paper fortunes were builded
in n single day, and the possessors
hugged the delusion that their wealth
was real.
In 1720 however, the more prudent
foresaw the coming storm and began
converting their paper into specie and
sending II 10 foreign countries. Specie
could be used anywhere and at any
time. To check this, an edict was
passed, nj Laws advice, depreciating
coin, and as this had no effect a second
edIct was passed 10 depreciate it 10 per
cent. As despotic power had no con-
troll over natural laws the edict failed
and the drain Of specie continued till
II became so scarce that trade was sc.
riously disturbed.
In this emergency, Gin February
] lT20.) Law induced the government l.
issue an edict forhiddiug the pse OF
specie altogether. This step il will bC
observed. was quite as radical M any
advocated by. the most ardent green
hackers OF to-day. Under this edicl
no mau was allowed to possess NOR,
I than 500 in coin under pain OF heavy
fine and confiscation. This law wal
expected 10 restore and maintain conf
dence in the paper money. Instead o
doing this IL precipitated the crisi.
which was sooner or later inevitable
The credit OF the paper sank AZ one,
aud foyever. The great bubble which
bad for a period dazzled all Franc,
With its brillisncy, suddenly collapsed
leaving nothing but ruin on ever,
hand. A few great fortunes towereC
above the general wreck, hut miser'
and want ruled everywhere among Ga,
masses. For long time the countr,
hovered on the brink Of revolution
and Law, who had been the publil
| idol for time, was hunted from tn
nation 10y an indignant populsce.
Such was the first great experimen
a the French people with irredeemR
BILE paper money.
About the middle of last centur
Austria had an experience with pape
money. issued through the Nafiona
! Bank Of Austria. The issue was frou
time 90 time increased and in accord
ance with we'll known law the purchas
4 ing power Of the whole declined. Ii
1876 the issue was ell ,0OO, 600; in lsO
il was 5000, 600, 90; in 1906 ii was 9l49,
000,00 The most stringent measure
we're adopted for the purpose OF bolster
ing mp the credit Of the paper money
but without success. 10 1910 the pap
money fell 10 500 for 100, then 20 SU
and then 20 1895. The utter want con
idence in the stability Of the curreno
crushed trade and enterprise. venaIi
~ and corruption crcpt into ever
branch of the public service. SalGrie