The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1878-06-13

a
rue gates are open'd, tho victory won /. u: |,
a,la anthems over sadsd sise rIsy Is
RIcnMoSDs May IA, 1878. e. ..
!, r 1907 .IEsts
The Americas Monetary Hyatem.
IFrom the Railway World
The advocates Of inconyertibie paper
money speak of gold and, silver money as a
relic Of Darbarism, and refer to paper as the
money OF civilization. The convenience and
utility OF paper money has been fully recog-,
nixed, but, after many painful experiments,
its adoption In any form, except that OF be-
ing convertible On demand into gold or sill
yer, has been almost universally con-
slemued. AZ the same time 1t must be adj
rnitted that paper money, guaranteed
by the Government, and made ie-i
gal tender for all debts, public and pr-
yate, and receivable for nil taxes and dues,
ought to he as good as gold and silver in the
country where it is issued. even If not con-.
yertibie into specie on demand. The main
difficulty Is that the volume Of such paper
money has always proved to be beyond
regulation and control. The easy creation
OF this money offers itself constantly as
remedy for all commercial or financial trou.
bles, and although the proposition is gen.
orally to limit the amount OF issue, or to
confine it to "the wants OF trade" there
mas never 3St uccb au ahSl1bSOo Va soSSS3S
in controlling the creative power.
It would be assuming 100 much TO say
that some method may not be devised under
which the precious metals as basis OF cur
repcy NAV not be dispensed with; but the
plans thus far presented are open to the OBJ
iections which have hitherto proved fatal 10
all convertible paper-money issues. The
propositions are fair enough at the start,
and the arguments are certainly very plallsi-
BILE. but the tendency OF the paper-money
system is to expand credit TO such vol
une, and to stimulate TO such excessive
speculation and fictitious valuations, that
it creates OF itself demand for an increase
of the same stimulant, and If it is not grant
ed the structure OF credit built upon it will
be in danger OF great shock, II not OF de-
struction. Such, at least, has been the eX-
perience Of this and other countries in the
il is 10 be avoided is EoJ clearly shown.
But "the American monetary system
proposes to remedy all this by an issue OF
fat lesal-tender money sufficient to meet the
wants of trade, give employment to labor,
etc. II there is any mode. by which the
wants Of trade can be accurately measured,
it has never been made known. In 1872 the
volume OF IegaEtender money seemed ample
for the transaction, OF an immense bust
ness, but in 1873. about year later,
it appeared SO inadequate to meet the
wants CT trade that the Government
was besieeed by n multitude OF promi-
nent merchants, bankers, ana capltallSts
10 increase the issue, and was actually
prevailed upon 10 release S26,000,000
OF greenbacks in the purchase OF bonds to
relieve the prevalent distress. Within
few months thereafterothe volume of legal
tender money was excessive, and now, with
a reduction Of S30,U0O000. there is appa-
rentfy an ample margin for large increase
OF business on the reduced amount. 1t is
manifestly impossible to maintain conf
dence in paper currency, not convertible
into coin, which can be expanded without
limit according to the popular idea or what
may be required by the wants OF trade. Ii
there is to be any safety or stability in pa
per currency it must not only be guaranteed
by the Government which issues it, but 1t
must be confined within limitations which
make that guarantee OF some value. What
confidence would the people have in cur
rency which could be increased al ti6ltuna,
ON the plea OF meeting the wants OF trade,
which are apt to be Unsuitable? 1t requires
no argument to prove that If the public debt.
could be thus increased. the public credit
would decline in the ratio OF increase, and
as the proposed legal-tender paper money
is intended to be in the nature OF public
debt, 1t is easy to see that confidence in it
would be impaired at each addition which
the indefinite and unknown wants OF trade
would require. And without confidence in
it, what would such currency amount to?
Such conditions Of issue would be speedily
fatal to "the American monetary SYSTEM"
But let US follow out the proposition OF
the Indiana Greenback Convention to issue
an unlimited amount Of full legal-tender
fiat money-that is, not bearing interest, IRE
ceivable for all dues, and payable for all
debts, public and private" etc. This, OF
course, eoptemplates the payment OF the eX-
listing public debt in greenbacks not con-
yertible into coin, and in process OF time
would give us volume Of more than 2,OOO,-
100000 Of inconvertible legal-tender paper,
and even more if Congress should decide.
that the wants OF trade requiredit Can such a
scheme findiavor with any respectable body
OF sane men! What q vista OF wild specu-
lation such project opens! What visions
OF paper prices and paper fortunes! what
Il host of adventures would crowd the
paths Of enterprise! And what myriad
of schemes would be launched upon the
paper ocean! The Mississippi enterprise
OF John Law and the South Sea bubble
would certainly be outdone under this in
genious American system.