The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1884-06-04

| lack OF gold ana silver money lot Jne uses
of business. Notes, drafts and checks
that is, promises or orders to pay money
have proved of service to supplement this
deficiency; but they all lack the element
of certainty, and business, conducted to
any great extent on such basis, is at any
moment liable to fall into confusion, and
involve those engaged in it in ruin or loss.
For several hundred years various devices
to make these paper promises, or orders,
more safe and sure have been tried. Com
binations of capitalists have established
institutions called banks, which have
been allowed by governmental authority
to issue their own notes to circulate as
money. These have proved in the long
run but little, if any, safer than individual
paper promises. While confidence pre-
vailed the paper money of the banks cir
culated, but at the very time when men
wanted to know, with eager anxiety,
whether there really was gold or silver
behind them, the test of presentation for
redemption showed that the specie was
not there.
The governments themselves have is
sued paper promises to pay; but up to the
present century these govern ment notes
have almost uniformly been issued in such
large quantities, and 80 recklessly, that
they have never been regarded with con-
fidence by the people, and have, in fact,
rarely been redeemed. Yet the need of
something to increase the medium of ex-
change in quantity up to the legitimate
needs of trade has been so great that pa
per money, poor as it was, has long formed
large portion of the circulating medium
in all civilized countries.
1t may be set down as certainty that
no perfectly safe substitute for gold and
silver as money has been devised, or is
likely to be. Promise and performance
are not the same thing. But as intel.
ligence spreads, and men learn " for sure"
that honesty is the best policy, it becomes
more and more possible to have an honest
paper currency. In England, France, Ger
many and the United States the only thing
that stands as antagonist to a safe paper
currency is the danger of destructive
war (or equally destructive preparations
for war; that makes it absolutely impossi.
BILE for nation to redeem its promises. In
such case the unredeemed notes may
constitute in reality forced loan or tax
from the people for the national protec-
ton. AS the ownership of these notes is,
in a rough way, nearly proportional to the
wealth of the individuals or corporations
which hold them, there is really not much
injustice in this way of raising money for
such a purpose. Certainly there is no
more than in drafting men to be shot
while fighting for their country's good.
1t is an absolute necessity of modern
civilized life that there should be money
enough in every country to do the bust.
ness of the country with ease and Ger.
tainty. But it is equally important that
there should not be too much money.
The natural scarcity of gold and silver,
as well as their other qualities, specially
adapt them to this particular use yet any
great excess of them Tor of paper based
upon them) in any one country, making
money too easy to be obtained, will divert
so many of its citizens from productive
industry to what is called speculation
(but what is really running in debt in
order to do big business) that in short
time panic and widespread ruin, in.
volving the innocent with the guilty, in
evitably ensues.
1t has not yet been settled just how
much money country can safely possess.
1t is not thing to be decided by popula-
ton alone. An agricultural country needs
much less money than commercial and
manufacturing country. 1t seems plain
that the United States has enough
money now-perhaps little too much.
One strong argument against too much
paper money (and this argument is in a
degree valid against too much coin that is
under value, like our existing silver coin
age) is that when, by over-trading (specu-
lation), we fall heavily in debt to other
nations, our most precious metal will go
abroad. and, leaving smaller basis for
the paper, will give us monetary pinch.
Judging from appearances, we have got
paper enough, and may soon have silver
enough of the present ratio. If this is so,
there should be no more notes supplied to
the national banks. The increase should
be stopped first in the most dangerous
form, which is paper.
There is class of theorists (and some
OF them are well-informed and respect
able reasoners) who have of late insisted
that no metallic basis is needed for a
paper currency. But finance, though I'M
doubtedly it has scientific basis, is as
yet an experimental science, and cannot
be safely reasoned out without regard to