Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-08-24
Xalue of Fiat Money.

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The advocates of fiat money point to the
new silver dollars as an Illustration OF the
fiat of the government to create value.
Here is the trade dollar of 420 grains OF
silver, which will pass if at all for but 90
cents while the new silver dollar which
contains but App grains of silver passes
for one hundred cents, or the same as
Rreenback dollar. The trade dollar is not
legal tender. but the new silver dollar is
legal tender. The former by weight is
worth more than The latter; but the stamp
of the government reverses the order and
makes the latter OF more value than the
former.
Now the difference made by the law be-
tween intrinsic and legal value in coin is
no proof of the force of the fiat to give
real 10 unreal value. The law says that
less than one hundred cents shall be
legal tender for one hundred cents, and
that is all that it does or can say. The
government says, in effect, to the creditor:
"If you don't take that ninety cent dollar
for one hundred cents and acquit your
debtor, you can't have any use OF my
courts or officers TO collect your debt, and
OF course, without the help of laws and
courts you can get nothing. You must
take that, or go without altogether That
is the way the ''fiat' makes value in pay
ing debts, but mark you, in nothing else.
Ii JOHN Smith wants dollars worth OF
butter in the market, or ten dollars worth
owner won't take the ninety cent dollar
for it, how is John Smith. or the govern
ment either, to help it? Tom Jones is a
strong reasoner in his way, and he says:
my butter is worth llar, and my cloth
is worth ten dollars, and I'm not going to
take ninety cents Tor one, or nine dollars
for the other. Give me MY price or clear
out" The fiat is not worth straw. The
government can give value in paying
debts, for it can withhold its agency in
collecting otherwise than as it commands,
but there the fiat stops. 1t can't make
man take its valuation TO. goods unless he
chooses. Ii nobody owed anybody, the
idlest thing in all this world vi yanites
would be the "iat" that ninety cents
should be hundred. 1t would be exactly
the rebel way of making their money par,
just as silly and just as futile. Ii the gov.
eminent were to make ten cents worth of
silver in legal coin legal tender for a
dollar-and it can do that as easily, and
not much more dishonesty. than what it
has done-does anybody suppose it would
bring dollars worth OF food or anything
else. though il would pay dollar OF debt
The fat can give value to nothing, but it
can force a creditor to take less value Tor
greater. by virtually outlawing him if
be does not. The rebels did that, but they
couldn't make their money good for any
thing but debts.
The same experiment was tried In the
case of the Continental money. 1t was
declared legal tender, but farmers would
not sell their produce for it except at a
large discount from the face, and it stead
lily grew worse aud worse. Then the
government declared that those who
would not take this money at its face
value in exchange for their products and
commodities should be considered and
treated as traitors to their country, but
this stringent, tyrannical. unjust course of
proceeding did not help the fiat money of
the Revolution one iota, and it went down
and down until it became entirely worth
less.