The Democratic press. [volume] (Ravenna, O. [Ohio]) 1868-1901, 1879-12-25

Necessity for Legal Tender Money.
In the comments made yesterday on
the Presidents scheme to demonetize
the greenbacks. we referred to the me-
cessity of a sufiiciency of legal-tender
money in order TO avert the calamity
of q panic and the sudden demand for
the payment of debts. When coin is
abundant and to be had on demand,
then no person wants it, and it finds
safe deposit in the banks and the
Treasury vaults. When the amount
of legal-tender money in the country
is limited TO the quantity of gold, and
that is subject to any demand that
may be made on 1t for expectation,
there must of necessity be be con-
slant apprehension Of q scarcity of the
debt-paying money within reach of
the people. During the years between
1861 and 1877 there was q continuous
flow of gold out of this country this
was not because we had q paper cur
rency, but because we were buying
more than we were selling, and had to
pay the balances in gold. Since 1876
have bought, and to pay US our bal
ances foreign nations have been send
ing back our bonds and the rest in
gold. The outflow and inflow of gold
to and from this country have had no
direct connection with our greenback
currency, but have been influenced by
the condition whether our foreign
trade left balance in our favor or q
belancc against rs. If there be full
crop in Europe next year, and if, ow-
lug to the rise in prices in this country
We shall largely increase our imports,
1t is not impr obable that in 1880 there
will be balance of trade against US,
and this balance will have to be paid
by an export of gold. Deprived OF
silver and greenbacks, and with no
legs,-tender money save gold, how
long would it be before, under the
necessary boarding and the continued
export, the means CT paying debts
would be exhausted? It would not
be simply q suspension of specie pay
ments, but q general suspension OF
payments in, any way of all debts.
The banks could not withstand the de-
mand for coin, and, there being no
gold and no other legal agent for pay.
ment, there would of necessity be a
total suspension and prostration.
Bank notes, not being legal-tender,
Would sink in gold value proportion
ately to the scarcity of the gold. a.4e
| We called attention also to the wise
policy now in force in England for
| ninety years or more of providing q
volume of supplemental money hav-
ing legal.tender quality, 1t serves
as q protection against any sudden
demand for coin. The notes OF the
Bank of England. being redeemable on
demand in coin, are also legal tender
in payment of debts. So long as the
country can have bank notes as avalla.
BILE as the gold coin for all legal-ten.
der purposes, there is no demand for
the gold. No man under the appre.
hensiOn of y scarcity of gold prepares
for the payment of debts by boarding
the coin; the paper being legally
equivalent with the goldin the payment
of debts, he leaves the gold on deposit
and provides himself with the paper.
The legal. tender bank-notes, there.
fore, furnish an ample protection to
the country against the sudden with
drswsl of the supply of gold, and q
panic resulting from q scarcity of legal
tender money is thus rendered almost
impossible.
France has also wisely profited by
this policy. The Government does
not issue any paper money of any kind
Under extraordinary circumstances
the Government authorizes the Bank
of France to issue a limited amount OF
bank-notes with q legsl-tender quail.
ty. These are not permanent issue,
and this policy is only adopted in cases
| where the amount of coin in the
country becomes scarce, and the facil.
tiles for paying debts are reduced by
the outflow OF the coin ori its boarding.
Thus, during the last war, and during
the German occupation, the Bank o.
France was authorized to issue bank.
notes to the amount of several hun
dred millions of dollars, which notes.
with all the previous issues of tht
bank, were declared to be legal-tender
The Government borrowed largely o.
these notes during the reorganization
of the Government after the over.
throw of the Empire. The country
therefore, suffered very little incon
venience by the expectation of tn,
thousand millions of dollars of coin L
pay the German indemnity. Having
paid off the Germans, and the outflow
of coin being arrested, the Govern
ment issued bonds, and from the ex.
traordinary reserve was able to pay
back to the bank, in certain install
ments, the notes 1t had borrowed. Al
these notes were returned to the banl
they were destroyed. Silver and gol(
began to pour into the country, and
the emergency which called for tn,
issue of legal-tender notes having
passed, the bank notes ceased to be
legal-tender.
In this country our Government ha
fno constitutional pow er to make bank
notes q legsl-tender. The power L
issue legsl-tender Treasury notes wa
derived from the exigeneies of th'
War. These notes, having been de
clared to have been constitutional,
issued, have remained in use eve
| einco To u;th6 ra u tham mr. IN ta +,