The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1878-11-07
galisre1lamenMs.
vxpERIENoE IN INITIATION,

nEtlCld n bLhtbubIt VI piOulhOAN Oo"
ples of the worlds experience in this d.
TectiOn. We are persuaded that there
are those who honestly imbibe the lDha'
tiOn theory, under the impression that
itis new and promising method OF re-
lief So far is it from being new that 1t
haa been tried upwards of dozen times,
in different countries, and always with
one result So far as we have yet heard,
not an argument has been put forward in
defence of the scheme that is not un
sound, or based on partial and mislead'
ing statement OF facts. We do not at
tempt to mention every instance OF ex-
periment in this direction, but onl y those
NO Drominent that their lesson is clear
and undoubted 1t is remarked ny the
fnflationists that the Bank OF Venice
issued notes which were at premium
This is true, but it ia accounted for by the
fact that it operated at time when brl-
Randage and robbery predominsted, and
when portable wealth was unsafe. Hence
notes we're issued based, supposedly, ON
deposit of gold and silver. Atthe break.
ing up of the bank the gold and silver
were found to be gone, but this was the
basis sofitsoperations. 1t proves nothing
for imitation, only that people avalled
themselves of notes at a time when
portable wealth was exposed to great
danger. .pr
John Law, in France, a thoroughly
trained finanCier, having studied bank
ing in the great bank Of Amsterdam, but
gambler, originated the Mississippi or
West India Company. Its capital en-
braced 624, 900 shares, at 900 livres each.
Its operations developed an intense spirit
of speculation. Land, food and all else
rose in price, specie went out OF the
country, the issue of notes, thus begun,
was steadily increased, till the amount
reached 1,025, 100000 livres, when the
crashed came. Law became a fugitive,
his dupes hunting him with the inten'
tion of hanging him to lamp post. lie
owed his company 20 235, ,375 livres. All
engaged in his speCulations were ruined.
Universal distress prevailed, and the
people emerged from it knowing that
they had passed through a feVerlsh
dream, followed by terrible awakening,
and that honest work was the only way
to recovertheir prosperity. lttook more
than hundred years to forget this expe-
Eience Then, in the midst of the reyo-
luton of l7S9 when the widest elements
were in the ascendant, and the Reign of
Terror impending, the French issued
what they called dSSigndtS-a paper cur
rency to be redeemed by the value of the
property of the clergy and the emigrants.
Thus a portion of the national domain"
was pledged as security for these as5ign-
ats. Twelve hundred millions francs
worth were issued at first, but this mum.
Der was steadily increased, till the mar.
ket broke to 49, Carlyle, in his history
of the French revolution, says of the ca.
lamity produced, there is, so to speak,
no trade whatever for the time being.
Aesignats, assignats, long sinking, emit.
ted in such quantities. sink now with an
alacrity beyond parallel" Hack fare
rose to six thousand livres, S. 500 for each
fare ON February l, 1896 On the Paris
Bourse gold louis of twenty francs cost
$3.50 francs in assignats. Wide spread
ruin and suffering, particularly among
the poor, followed. Is it surprising that
the French have healthy dread Of in
datiOn? Is it strange that after the Ger
man war they so promptly resumed spe.
Gle payments2 They knew from sad
experience just what initiation meant.
Russia tried the experiment in the
reign of Catherine H. in l770. In her
war with the Turks she issued what were
called designations, chat were paper money
decTeed to be equal to the value of the
silver ruble They speedily fell to one.
fourth of the value of the silver ruble,
Paul l. attempted, by the full use of his
power, and by threat Of hanging, to force
the value up, until the government was
at last, unable to maintain the value,
compelled to recognize them as four to
one. And thus they did their work,
spreading ruin, until they finally disap |
peared. We have already alluded to the
"6at" money Of Canada. This was issued |
in a time of public disaster, and under
the exact theories now advocated here :
/. That the stamp of the government
gives value to money. 2. That large |
emission of paper currency wOuld pro-
mote business prosperity. 4, That it |
would retain its value, and promote the |
development of wealth. Their expert
ence was uniform with all the others. |
The first effect of the issue was to pro.
mote, not industrial activity, but wild |
rage of speculation; and this created a
larger demand for " fiat" money, which |
reduced its value, till the bubble burst.
Then followed wide spread desolation
and ruin.
England suspended specie payments
during the NapoleoniC wars, and the sus.
pension continued about twenty five
years, with such demoralizing results
that Parliament, despite bankruptcies
and failures, forced specie payments as
the only safety of the nation.
We have passed through the initiation
Of continental money, with, its following
1epudiation. We have had our State
bank system, which gave us the same
thing, under pretence of coin basis,
and had two terrible paniCs, in 1887 and
ness of that system.
Bolivia, in 1873, was a specie paying
and relatively prosperous Republic
The fever for paper money took posses.
sion Of them, and in five years they find
their money worth but sixteen cents on
the dollar, and ruin general. Buenos
Ayres has had the same experience. In
all these instances, and others that might l
be cited, the experience has been uniform.
Imitation has been inevitably followed by
Reputation and severe industrial pros.
tration. Is there any new light now,
that assures different result, should we
follow this pollcy2 Is there anv argu.
ment, or fact, that points to a different
The arguments are the same,
and the idea is not original. " Fiat"
money has been tried; paper stamped
by the government and based on the
public domain, has been tried also paper
issued as money. and based on the public
faith. Our iDhalionists intermix all
these ideas, but all have been tried. In
9very case they have promoted specula-
lion, not industry; then idlepess and
5hriftlesness; then necessity for larger
issues; and finally the bubbles have
l. r |