Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-11-02
From the Boston Journal
How Fiat Money Works.

Perhaps as good an instance Of the work
ing of fat money as can be found in history
is afforded by the Southern Confedt racy when
it considered itself government. Mr.. Geo.
Cary Eggleston, in his book A Rebels Rec
elections" tells the story very wildly. The
system adopted was in accordance with the
fat theory now advocated by many of OR
greenbackers, that is, it consisted chiefly in
the issue of treasury notes enough to meet all
the expenses of the rebel government As
the only hindrance was the difficulty of sign
ing the notes with sufficient rapidly, there
were found several thousand young ladies in
Richmond willing to accept light and remu-
neratve employment at their homes, who ex-
ecuted the task with neatness and dispatch.
The money was readily taken and was quite
popular for time. Soon values began to
huctuate, but always in the main kept rising
Most men fell into the habit of paying what
was asked. SPECTATORS were in their
glory, for to buv anything this week
and sell it the next was to make an enormous
profit as matter of course. 1t was a curl
GUS fact that when prices were most cxtrava-
CANT there seemed to be no sort of ratio ex-
listing between the values of different articles.
Mr.. Eggleston says 81 bought coffee at for
ty dollars and tea at thirty dollars pound
on the same day. My dinner at hotel cost
me twenty dollars, while five dollars gained
me a seat in the dress circle of the theatre.
Mr.. Eggleston can only account for these and
other like instances by surprising that the f.
nancial chaos had made dealers reckless in
regard to all relative values. A factous
Southerner's explanation was, that prices
were SO high nobody could see them, and 80
they got mixed for want of supervision"
This depreciation could not be owing to
any want of confidence in the ultimate for
tunes Of the Coniederacy, for Mr.. Eggeston
testi6es that he never met a man during the pc
Rod referred to who expressed the least doubt
Of their final success. So strong was the
popular delusion on this point that member
of the Confederate Congress actually pro-
posed that gold-of which the Government
had a small stock--shonld be offered for the
redemption of treasury notes, his idea being
that only few timid and unpatriot'c people
would take it, and that confidence would thus
be re established, paper would approximate
to par, prices would 90 down, and any fur
ther needed number of treasury NOES might
he issued Does this sound absurd? But
what else is not absurd in the process of try.
ing to make fat money answer national pur
poses? Equally futile was the effort of the
Confederate Government to fix the origina
notes at two-tbirds of their face value, and
make them convertible into notes of new
issue, which, it was fondly hoped, might
bring the whole curIencv to par. Instead Of
that the new notes partook Of the deprecia
ton Of the old, and both sunk into utter and
absolute worthlessness.
Now here was an experiment tried, not as
far of in time as the French Ass; gnats and
the old Continental money, but in our own
day, although it has not received sufficient no
tice on account Of the general Indifference
with which our people have regarded the ii
terna administration of the rebels during tn,
war. Every feature, however. of the essen.
tial fiat money scheme was embodied in thi'
experiment. 1t was tried by trustful cor
Gding, hopeful people, who submitted to thc
terrible evils in posed upon them far better
We imagine, than would even thousands OF
Northern men who are now shouting the par
rot-like clamor for fiat money. 1t makes ne
difference who tries this vagary, the resul
will always be the same As we learne,'
something from the rebel monitors. from thei
earthworks and defences, and even receive
new md humane impulses from their horr
Bile prisons, let us also learn from their gisap.
tic financial blunder.
arp pDSTOF ETTEI