Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1885-12-29
Ahont Greenbaclss. go.

| Of organization very long.
About Greenbacks, &c.
We were not at oil surprised when
we received the following
HALIFAX co.. VA, Dec. 20, 1883.
| To the Editor ofMe Dispatch:
Have read your article 81 About
Greenb.eks," and think itpretty sound,
but would like TO ask question or SO
for Information
/. How did the present greenoacks
Get into circulation, and why could not
others get out in the same way!
Iwould suppose by your theory the
Government must have given them
away. but the bad part about that is,
as some of us were too young TO get
our part then, don't you think the
Government ought to make another
division for those who did not get any
thing last time? -,
els it proper inference to draw.
from your argument, that nationai
notes would not. like greenbacks, fall
below the par Of gold if the United
States got into war with a powerful
Government If it is, please state why
national notes would not depreciate in
the same proportion as greenbacks?
HALIFAX SUBSCRIBER.
|. Greenbscks were first issued dur
ING the war between the States as
" forced loan that is to say, UNCLE
SAM ran short Of real money, and, as
he had the power to do so, compelled
his creditors to take paper money. lie
issued hundreds Of millions of dollars
of greenbacks, and we have no doubt
that the Government and the people OF
the United States lost by their issue
five times the amount Of them. They
were worth in gold in January, 1862,
as much as 974 cents; but on the LIST
of July, 1854, were worth only 3Sl
cents on the dollar. So that one hun
bred millions Of such greenbacks would
have purchased as much gold, or flour,
or bacon, or beef, in 1862, as two hun
dred and fifty millions Of them would
have paid for in 1864. In other words,
the Government lost the last one bun
bred and fifty millions it issued, and
"gained loss when it forced green
backs upon the country. Would our
correspondentliket to see that experiment
repeated: The interest on $3.50, 600, 600
of green6acks (f this is what you want
TO save is lat the present rate paid by
the Government about ten millions of
dollars. But if the Government should
issue three or four hundred millions
more of greenbacks and the result
should be their depreciation by only 6
per cent, the loss to the country would
be twenty millions at once. Our cor
respondent could not possibly derive
any benefit from their issue. IL the
Government owed him million of
dollars and paid that sum with the new
issue lie would be able to buy not as
much by one tenth with his money as
be could buy with million Of dollars
Of the present currency, which is at par.
Nobody would get any of it except the
Governments creditors. In other
words, none Of the new greenbackS
would be given away.
.. Yes, it is proper inference to
draw from our argument that national.
bank notes would not fall below the PAL
of gold so soon as greenbacks would in
case Of war on our part with a pow
erful nation. The bank notes have be-
hind them net only the credit of the
Government, but all the assets oil
the bank. If the assets Of the bank
were worth so per cent. of the value OIL
the notes, the greenbacks might decline
50 pei cent. before the national-bank
notes had declined at all. Here, for
example, is the First National Bank o.
Richmond, which has out only $3.50, 00C
Of notes and yet has at least a million
OF dollars of assets and we don't know
how much more wherewith to redeem
those notes. The notes issued by thi
bank, like all other circulating banl
notes. are redeemable both by the Gov
eminent and by the bank issuing them
The Government has 500 Of its owl
bonds belonging to the bank for ever,
800 Of the banks circulation wherewit
, TO raise money TO redeem the ban
: notes, and the bank notes have there
, fore not only 100000 Of Government
bonds behind every 100000 Of notes
|, but in addition thereto all the assets {
I the bank. In fact, The. Goyernmer
p holds, in addition to its own bonds,
!. first lien upon all the assets Of ii
v banks whercwith to redeem their circl
= lating notes. SO to speak, the greer
d back is negotiable note having no Ell
o dorser; whilst the national-bank no
n is a negotiable note having good e.
" dorser. Who in case of information
Is difficulties and threatened war wi
J. France or England, or both, would n
IL rather have o note Of the First Nation
i. Bank Of Ricl,aond than a greenbacl