The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1891-03-04
FIAT MONEY.
HUKLE, Kan. March !, 81,


In the EAGLE of the 25th ult., there IS
an article from the pen of MIR. Bldwell
in which ne says that the government
can no more create fiat money than 1T
can create a fiat star, etc. The great
trouble with Ir. Bidwell is this; he don't
seem to know that money is created by
law, or the fiat of government. Ii he
had said that we can't create wealth by
law, i. would have been correct; but
money is sinlply an agent for the pur-
pose of exchanging wealth, and is always
created by law.
| had supposed that from the flood of
light that has been lighting up the
money question for few years back,
that the people who believe
that it is necessary that money
should possess intrinsic value,
would have become extinct. But the
old saving, ''that there are none so bind
as those who will not see" seems to hold
good in this case.
For the purpose of dispelling the
cloud that seems to have enveloped the
mental vision of Mr.. BidwelI, | wish to
take up the laws that created the
old demand notes and greenbacks.
The demand notes were, when first
issued, redeemable inspecie, and the gov
eminent not having the coin to redeem
them with caused them to fall per cent
below par. These notes were not then a
legal tender, but the government seeing
there was no prospect of its becoming
able to redeem them in coin, repealed
the law by which they were made re-
deemable in coin but at the same time
made them full legal tender the same
as it did gold and silver coin, and they
Immediately went up from 3 per cent
below par and remained there through
the war
This was before the greenbacks were
issued. Wall street became alarmed at
seeing the government could create
money out of paper equal IN value to
their coin, caused an exception TO be
placed on the back of the greenbacks
saving among other things that 1t would
not receive them for import duties.
Here we have two kinds or money,
both issued By the same government.
each made of paper; the only difference
in them was that one had
more fat than the other and the
dollar having the necessary amount OF
fat exchange for 50. SIS of the other, and
it would also exchange at par for gold
dollar.
Common sense would teach rs that if
the greenback had of been full legal
tender, it would have been equal IN value
| to the demand note which was az par
with coin.
The premium on coin and the demand
notes was caIsed by there beng receiva-
able for import duties. While the green
| back was not: had the greenback been
| receivable for duties on imports, 1t Is
not likely that any importer would have
given any premium for coin when the
! greenback would have discharged tie
same obligation.
This idea of specie basis is q super
stition that has proved very expensive to
! the people. On account OF IL We SOLO
| two billion eight hundred millions worth
of bonds for 80 cents on the doilar-a
loss of one billion four hundred million.
| After the war we must set up our Idol
of specie basis. To accomplish this we
contracted the currency from so per
| capita in 1855 10 less than III
/ teen which has caused produce
| to shrink in value over one
| naIf. he value OF the pro1uctS Oh eSi !
culture. IS published By the commits
sioner OF agriculture, exceed s., o0o, coo.
| coo Count the shrinkage IA values
caused by the contraction OF the cur
! rency at one half, this would BE A,VO,-
! 900. coo per annuua. or So. 90 ooo, GO N
the lsst twenty years. This SUM ~ouid
/, amount 10 a fortune Of Slo,9 20 esoh
family engaged in farming, gam n
| price OF 500 per annum per iaILa4s
Add this sum to the price OK our produce
and We would have bank accounts IN
stead OF mortgages, fne residences IN
stead OF novels, our BOYS could attend
/ school instead OF beng compelled 70
labor eighteen months per year 10 psy
1 interest on debts IL this calculation
count ten hours days labor liz fact sse
| could live. where low We merely exist