The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1883-07-05
Fla. Money.


Fiat Money.
A good friend Of ours writes to us as
follows:
LYYcHBuRG, Va, July 2, 1888.
To the Editor Of the Dispatch;
II you can conveniently do so ! should
like for you to refer to the editorial In the
Dispatch for August IA. 1878. answering
(may say answering atO certain queries
OF mine in regard TO fiat money, &c, ana
to read the same along with and In the
light Of your editorial OF to-day on the
"Trade-Dollar Nuisance" AS editors
never die, iys fair to presume both articles
were written by the same person, ana tnae
you are that person. Now, IL seems
10 me that the last editorial shows
a great advance upon the views expressed
in the first, though you are still 10Th TO go
the whole length, and In plain terms admit
the logical consequences that money!
mere device TO avoid the inconvenience OF
actual barter, a mere medium OF exchange
need not have any intrinsic value, such as
Is claimed for gold and silver, but needs
only the fiat OF the laoc-mdkifag po,oer, at
tributing TO ii a tax-pdyirg and deot-pdy-
ing quality and that this expression by
public tap OF the popular ,oiH and general
assent can and will make any material or
substance answer all the conditions OF
money. Ii might be desirable, on
the one hand, 10 have the circula-
ting medium made OF some hard sub
stance that il might be durable, not
wearing out in the handling; whereas, on
the other hand, paper is better than any
such substance by saving bulk and weight,
and worn, lost, or destroyed paper money
can be reissued, as in the case OF bonds
and shares OF stock lost, and by system OF
numbering, and under certain conditions.
The present suddenly-g0t-up panic and
eagerness to get rid OF the trade dollar for
IS cents or less, while 4l2 grains OF silver
are still worth 100 cents, seem TO me to
establish the correctness OF the view
Of the advocates OF fiat money-of
those who maintain that the fiat OF
the Government, and that alone, can
and does make and unmdte money.
Let Congress upon its assembling declare
that the trade dollar shall be legal tender
for dollar OF debt. and shall be received
by the Government for dollar Of taxes
and import duties, and Immediately, ipSo
.fdcto, the trade dollar Of 400 grains OF sill
yer strange anomaly y is porth as much as
Az grains OF silver-and some people toW
be found 10 haze made suddenly large sums
by the operation. "There are millions in
it, And let Congress declare that
twenty-dollar gold piece shalt pay only fiji
teen dollars OF debts or taxes, and imme-
diately the eagle will shrink up to fifteen
dollars.
What does this show but that the value
OF gold and silver even as money is purely
".fdctitioaS and "fcthiouS"? FIAT.
Yes, the article OF 1878 was written by
the present writer, who has just read it
over, and has found in it not one word
which he would change. 1t is, il we may
be allowed 10 say so. good essay on the
subject which it touches.
"Fiat" thinks that money need not have
any intrinsic value. II not, yard-stick
need not have any length nor bushel-
measure any capacity.
We will endeavor to show Fiat
where he misses his footing and falls. To
make the trade-dollar receivable for GUS
toms-duties, and legal tender for private
debts, would undoubtedly cause it to pass
as real dollar; because it is thus in effect
redeemed with real dollar. But il there
were no real dollaIs-dollars having intrin-
sic value-there would be no way Of fixing
the value Of greenback dollar, or any
other dollar so called which does not pos
sess intrinsic value. The dollar is q mea-
sure OF values; but the same would be
fruo 90 IN a poaactira NJ copacitv IL Com
gress were to provide by law that bllshel
Of wheat should pay the tax on gallon Of
whiskey, and there were no such measure
rs q bushel. the law would be no law, and
the tax no tax. So also there must be a
real dollar before there is anything for the
Governments fiat to operate upon. II the
mere fiat Of the Government could make
real money. ii would be very foolish in the
Government not to make everybody rich;
and as 1t would be Just as easy to make a
million OF dollars rs one dollar, there
would be no excuse for levying any
more taxes. "Fiat'' is right when he
says that by making the trade-dolar a
legal tender Congress could cause it to pass
as its face-value; because there are real
dollars which Congress would thus make
the standard by which to fix the value Of
the trade-dollar but Fiat is entirely mis-
taken when he says that Congress could
make a twenty dollar gold-piece worth only
fifteen dollars by any law it could possibly
pass. Gold has intrinsic value. 1t is
weighed all over the world to ascertain its
value; and IL UNCLE SAM were to refuse to
receive II for taxes, 1t would still be worth
in London, Paris, and every other Eu-
ropean or Asiatic city, and consequently
In New York, Just what the traders of
those cities should find 1t to be worth.
Our article Of 1878 was as follows:
Our correspondent would have had a
stronger case II he had taken the greenback
itself, which Is worth 09s cents In gold,
though 1t has no intrinsic value. The secret
lies In the fact that the existing greenbaek
IL not "fiat +" dollar, but promise TO pay
q dollar. A " fiat" dollar Is piece OF
paper upon which is printed "This is one
dollar" but which rs not TO be redeemed al
any time or by anybody. The redeemability
OF paper money is what makes it good.
England and France use no paper money
that is not redeemable in specie at sight.
The "fiat" dollar has no such quality.
Redeemability does not belong to it. The
difference between our present greenback
and The fiat" greenback proposed by the
greenback lunatics is the same as the differ.
ence between CARRIERS stage-tickets, which
are redeemable in rides, and stage-ticket
which should not promise to pay ride,
but should declare on its face, "This is a
ride"
I. Now as TO the Mexican dollar Of 400
grains aud the United States dollar of 412S
grains: The former Is not our own eur.
rency, and Is not redeemable in this country
IN anything. IL furnishes a striking illus
tration both Of what real money is and of