Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1878-10-17
AN IRREDEEMABLE CURRENCY.
A Leaf and Lesson from History.

Leaf and = Lesson from History.
Bacon defined history to be phi
losopey teaching by example, az. d
the example of France, during the
first five years of the reign of Louis
XIV, from 1716 to 1921, affords an
important study to the financier and
statesman Of the United States.
At the time of the death Of Louis
XIV, September ], IT'S, France was
utterly bankrupt, and the following
is described by Henri Martin, in his
history OF France, as the condition
of the finances. reference is made
to the translation by Mary Il Booth,
published by Walker, Fuller & Co.,
Boston, 1860:
There were 590,O0O,OOO OF State
notes in circulation, forming, with
the rest of the floating debt and the
deficit of the year. 7S9, OOO,O 900 of ex-
igibie debts. - Vol. 3. %. II.
A franc being about twenty cents,
$50. 1000, 900 of francs would by $ll8..
100000.
This being the case, and the nation
actually bankrupt, the famous pro-
Jector. John Law, proposed to extri-
cate France from her embarrass-
ments.
Quoting from Henri Martins
History of France" the following
are Civ n as his principles:
"Law thought the State should
generalize systematically what is
done instinctively among private in
divIduals, and should do what pri-
vate individuals cannot do, that is,
create money by imprinting the bill
OF exchange with the stamp of pub
lie authority. Money is the basis of
commerce. To multiply money is
to multiply commerce. The prec-
ious metals cannot be multiplied at
pleasure; it is necessary to buy them
OF the owners of the mines.
Paper can be multiplied al pleas
ure by the State in proportion 20 it's
needs, and the quantity OF money
can thus always be made equally
approximate to the demand. Every
emission OF paper, by increasing the
money OF the nation, will increase
It's commerce, wealth and power.
The consequences of this innovation
will be not only the increase Of the
general wealth of the country, but
an internal revolution in society; the
high interest of money, proceeding
from its scarcity, the multiplication
OF money will lessen usury and se-
cure the State and private individ.
uals from the imposi.ions of monopo-
lizers Of specie.
1.-The financial organization of the
State is false. The State takes and
does not restore; borrows, and does
not lend consumes, and does not
proauce The State should assume
an entirely new form. Il should
give credit, and not receive tit
should become banker."- Vol. 3,
p. %.
1t Will be observed that these
principles are almost identical with
the principles urged by the Nation.
ais and the imitation wing of the
democratic party at the present da !.
10 the foregoing principles advo
Gated by John Law, the historian re.
marks as follows:
"No one can constrain me to take
promise for the thing promised it,
self IT do not believe In the pram.
ise Paper, which is almost value-
less, cannot, therefore, fill the part
OF precious metals; it can only rep.
resent them by voluntary agreement.
The State cannot create values,
that is, mako something out OF moth
ing-any more than private indiyid.
uals., it substantiates existing val
ues; if it abruptly and arbitrarily
changes the relations of these values
by changing the nominal value Of
the metallic currency, it docs an in.
lqultous and absurd thing, as Law
himself clearly demonstrates in a
memorial of 1715, When tho State
creates paper money it creates the
sign OF reai estate or other values
which the paper represeu te; it does
not Greats 3 new value. The ides
that the State creates new valu,
10 a faliacy OF the Legists of the
Middle Ages; it is by this sophisn
that they justified the royal counter
letters. Philippe tho Fair, and his i'm
itators.
Paper being unable to be thu
equivalent of specie, it's compulsory
currency is violation of the eco
nomic laws. If this violation may
be salutary in ma ny cases, it is like
all those means of public safety
which violate certain laws in tht
name of higher laws. 1t is econo
my yielding to poiicy."-P. 81.
Bancroft, in his History of ths
United States" eleventh edition
Boston, Little & Brown, 1916, thus
exhibits Laws principles
cit was the faith of Law that the
currency Of a country is but the rep
resentative of It's moving wealth ;
that this representative need not
possess, in itself, an intrinsic value,
but may be made, not of stamped
metals only, but of shells or paper ;
that where gold and silver are the
only circulating medium the wealth
OF nation may at once be indefi-
niteFy increased by an arbitrary In
fusion of paper; that the credit con-
sists in the excess of circulation over
immediate resources, and that the
advantage of credits is in the direct
ratio of that excess. - Vol. 3, Chan
%, p. $50.
Processing these views, Law es-
tablished bank in Paris, in 1716,
called the Bank of France. At that
time there were very few banks is.
suing circulating notes, the Bank of
Hamburg and the Bank of En- gland
being perhaps the only two. His
bank was bank OF issue, and was
so great success that, in December,
IT'S, the bank was declared royal
bank, of which the King was the
responsible head.
The proceedings, upon declaring
the bank royal, and the immediate
results, are thus described by Charles