The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1885-10-26
MONEY OF THE PEOPLE.
The Laws Governing the Issue Of Green-
backs and National Bank-Notes.
Congress the Only Source of Authority-the
United States Treasury a Bank of Deposit
-Mutillated Notes Paid in Full.

WASHINGTON, Oct. 24-It may be truthfully
said that the people have issued all the money
now in circulation on the credit of the United
States. There is extant an idea that the Secre
tary of the Treasury and the Treasurer of the
United States can issue money ad libitum-that
lis, that they have authority to issue, at any
time they think the emergency requires, such
money as there is a demand for. This is a mis-
take. These officers never direct the issuance of
amy money without authority from Congress-;
even the President has no right to authorize
the issuing of money, under any circumstances.
If an emergency should arise, like a war or great
disaster, requiring the issuance of additional
money or different kind of money. or it was
found that it was inadvisable to continue the
issuance of a certain kind of money, nothing
could be done without the authority of Congress.
The Treasurer of the United States is simply
the custodian of the money Of the government.
Within his Office there is no power whatever to
depart from the control of money as it is begun
under a new law. Congress directs everything;
the people elect members of Congress. and the
people, therefore, issue the money that they must
finally redeem.
Except in coin everything depends upon the
honor of the government in matters relating to
money. There is no intrinsic value in any of
the obligations current, except gold and silver.
Even notes issued by national banks depend
upon the honor Of the government for their
value. Neither the national banks nor the
vaults of the treasury are responsible for them.
National bank notes are issued by the Treasurer
for the national banks, which are required to
1aD0e;t oe ,oo,c;+ Gov ~. oodococ+;oo &c +ba;r
notes United States bonds. Banks receive
from the Treasury 80 per cent. of the face value
of the bonds deposited to secure the circulation
of these notes, that is to say, if a national bank
deposits $50, 900 of United States bonds with the
Treasurer it will receive in return $40, 900 of
national bank notes bearing the name of the
bank which is to issue them, and containing
blanks for the signatures of the president and
cashier of the bank. These notes must be re-
deemed within the life of the charter under
which the bank was organized, which is twenty
years. Now, the bonds which were deposited
with the Treasurer to secure these notes
were. in the first place, issued by the govern
ment to pay off the national debt-a
debt contracted by the early Improvements of
the government and the wars. The bonds are
simply obligations of the government to pay,
within a certain time, the amounts specified, and
Of course their value depends upon the honor of
the government, just the same as it would de-
volve upon the honor of a man to redeem a note
he had given; so that the value of the money
rests upon faith in the government. This
refers, of course, only to government
obligations aside from coin. If a man
has a S. gold piece in his pocket and the govern
ment repudiates its debts he gets S. anyway,
and it doesn't affect his capital, because our coin
being of the standard weight Of all nations,
would be redeemed, because Of its intrinsic value,
by any other country.
Probably the most faith by the people in the
honor of the government Is required in the
handling of ereenbacks or legal tenders. There
is not a particle of security for these notes ex-
cept the promise of the government to
pay. They were simply issued by di-
yection of Congress, and are not based
on bonds, coin, or anything except that law,
which may be repealed, and which may be re-
pudiated, and which would probably be first if
The government ever concludes to repudiate it's
obligations or any portion of them.
The people who receive money daily in ordinary
transactions of business consider the greenback
the best money they can get; in fact for several
years this note has been received in preference
to gold, or silver, or certificates. The favoring
of greenbacks does not grow altogether out of
the fact that they are free from taxation in the
States, but out of the impression that they bear
the highest stamp of honor of the govern.
ment. Now. as a matter of fact, if there is to
be discrimination in the real value of a note or
paper obligation of the government, it could
better be made in the direction of gold and silver
certificates. These certificates are issued in
place of the coin. They simply represent money
that has been coined and placed in the vaults of
the Treasury. They have a metal basis or Sc.
curity, and the government pledges itself on
their faces to red eem them in the coin specified.
One knows in what they will be redeemed. The
treatment by the people of these different notes
Or government obligations might be considered,
or ought to be, something in this light: The
farmer who issues a certificate to deliver to the
miller so many bushels of grain is more likely to
carry out his trust than the one who pledges
himself to redeem a certificate ne NAV have
issued, in cash, at market value, when he has
neither cash nor grain. The governmental issu-
ing gold and silver certificates. has the valuables
IN its vaults to redeem them with, while in issu-
ing legal tenders or ereenbacks it has nothing in
sight for that purpose.
Gold and silver certificates have been issued
together in denominations of $40 and $50 mostly.
although they run up as high as ST.. 1000, S., 900
and $780, 900 each. An effort is to be made in
Congress, this winter, by Mr.. Warner and 9TH
ers. to pass a law authorizing and directing the
Treasurer of the United States to issue silver
eerlncatea In denominations of SIS. So and
81. This would give the country ali the bills
of smaller denominations it wanted. The idea
of not issuing silver certificates in denominations
of less than $40, and tho order of the Secre-
fary of the Treasury, recently. to stop the issu-
arce of Treasury notes of the denominations of
81, 81 and S.. was to force into circulation silver.
1t is argued against the issuance of small silver
certificates, that the standard silver dollar would
never get into circulation if these small certif-