Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1880-08-19
FIAT-MoEEY DEMoCsACY.

&c opposed to National Banks, and are in /
+" favor of substituting for their issue the
g currency of the United States. ca We
g favor the payment OF the bonded debt OF |
:. the United States to the extent of every |
Sc cent now in the Treasury available for
that purpose. 81 We are opposed to
" any refunding Of United States bonds
" without reserving to the Government the
right to pay the same at its option.
This is the latest programme of the
Greenbackers, or fiat-money people. 1t is
somewhat different in form from their pre-
vious propositions, but it leads to the same
end, and that end is national bankruptcy
and reputation. The pretense for substi-
tuting national currency for the issues OF
the National Banks is that the interest on
the bonds now serving as securities for the
National Bank issues would be saved. This
is a fallacy. If the entire currency were
issued by the Federal Government,
it would be necessary to keep in
the Treasury con reserve of at
least $3.50. 600 600, and the interest
on shis reserve would be equal to
the alleged saving in the National Bank
issues. The plea Of saving interest has,
therefore, no force whatever, and is simply
adelusion. This, however, is but one OF the
smallest objections to the proposed change.
Without the aid of the National Banks it
would have been impossible to refund the
public debt as it has been refunded. BY
their aid saving of twenty million dollars
per annum has already been effected, and
there is reason to believe that in short
time they viii be able to assist the Govern
ment in placing new issues OF bonds at 81
per cent, thus efecting still further reduc-
lions in the public burden. Were the Ma
tional Banks abolished the refunding ope-
ratiors would come to a standstill, and all
further saving be prevented. Again, all
experience proves that Congress is not a fit
custodian of the currency /; that it is GER
tain to do mischief by tampering with it,
and that the only safe plan is to take the
issue of paper money out of the hands OF
the Government altogether.
The second proposition of the fat money
Democrats is to pay out all the money in
the Treasury as far as it will go, in the
discharge of the bonded debt. Here again
the pretense of saving interest is put for
ward, and here again the pretense Is
false one. The effect of paying out all the
money in the Treasury for such purpose
would be to leave the paper currency of
the country without specie basis. Re-
demption would be undone, and we should
instantly be plunged into the bottomless
pit of fiat money. This is what the Green
hackers are aiming at. They are not anx-
ious to have the bonded debt paid They
only seek to sweep away the coin reserve
in the Treasury. The measure they pro-
pose is both imbecile and wicked. 1t
would cause the depreciation of every
greenback and National Bank note and
insurance policy and pension in the coun-
try. What that means may be gathered
from the following extract from one of
General Garfeld's speeches in Congress.
&" In the census of 1870" he said, sit was
minated that on any given day there
were Sl20, 100000 due to the laborers
for their unpaid wages. That is
"a small estimate. Let the greenback
dollar come down ten per centun, and
I" you take SO, 600 600 from the men who
90 have already earned it. You will have
60 destroyed ten per cent of the value of
"a every deposit in the savings banks, ten
q per cent Of every life insurance policy
70 and fire insurance policy, of every pen
- sion to the soldier. and OF every days
81 wages OF every laborer in the nation.
But ten per cent. would probably be
very small portion OF the depreciation
which would ensue upon so mad step,
as that which the fat money Democrats
advocate 1t is impossible to tell where
the depreciation would stop. Since every
thing would depend upon the stability of
the Government currency, and since that
would no longer have any coin basis, the
whole commerce and finances of the coun-
try would be thrown into hopeless con-
fusion, and after q season of general disas-
ter the nation would be driven upon the
rocks of reputation. That is the kind Of
financial policy the Democrats of Sacra-
meDto and Placer have adopted and which
they appear to think peculiarly shrewd
and adapted to the popular taste.
Their third proposition is that there
should be no further refunding of bonds
g without reserving to the Government the
fright to pay the same at its option"
The answer to this is simple. Whenever
governments go into the market to refund
their debts, they must offer inducements
to investors. They cannot make their own
terms without reference to the interests OF
those whose money they wish to borrow.
They cannot sell their bonds unless the
investment is q good one, and short-term
bond at low interest is not good invest
ment Investors may be willing to accept
low interest on consideration Of long
term, but they viii not take the low in
terest and the short time together. The
third proposition of the fiat-money Democ-
racy, therefore, is really equivalent to a
demand that no more refunding shall be
done for assuredly none can be done on
the terms proposed.
The whole three propositions are in
every way opposed to the public interests,
to common sense, and to the principles OF
sound finance. Their adoption would lit
orally ruin the country, and their evil
effects would be felt first and most heavily
by the working classes and the thrifty and
industrious poor generally. There is no
possibility of any real saving in these ex-
travagant proposals, nor do we believe that
any such purpose entered into the minds
of those who conceived the plan. The
agitation comes from those who have for
years been fighting honest money in every
shape who have been denouncing the