The advocate., 1891-10-21


tender, and collected the tax In silver. This was
In 1773 Now mark the consequences. This
contraction Of the circulating medium paralyZed
all the industrial energies OF the people. Ruin
seized upon the once fOurishing colonies; the
most severe distress was brought home 70 every
interest and every family; discomfort was urged
on to desperation Till at last "human nature
arose and asserted It's rights" In 1775 the
American Congress first met In Philadelphia;
in I776 America became an independent state.
What then becomes of your statement
that "such experiments have always
proven failures and ruinous to the cOun-
try trying them" Again; you refer to
the monetary system of John Law. Have
you ever investigated the causes that led
to the failure of that system and the
consequent ruin that followed? Let me
give you little light on this subject
also. Mr.. Thomas Fl. Goddard in his
history of European and American bank
ing, has given US very clear exposition
of Mr.. Laws system and of the causes
Of its failure. After giving an account
of the system itself, and of the currency
Issued he says:
The original prOprletOrs acquired immense
fortunes. Money was abundant agriculture,
manufactures and commerce fOurished; and
the government IUdS enabled to relteUe the people
from tdres to the amount Of S7.OOO,OOO livres, or
Sl6,3l2,5OO.
At this period the credit of France was at its
height; but it soon experienced a reverse. that
involved thousands In misery and distress.
The ministry, who were opposed to no law,
represented to che regent that 1t was necessary
to aQuallze the value Of paper currency, and the
coin, by either raising the denomination Of the
latter to 100 livres the mark, or reducing the
former one half.
This absurd notion prevailed In the council,
and It was resolved to diminish the Value0f
the bank notes that a just proportion between
them and the coin might be maintained.
For that purpose an edlct was passed on the
2lSt May, 1920, ordering that shares should be
reduced to 5000 livreS, and on the first Of July to
1900 ivreS, and so on 500 livres month, till the
lst Of december, when they were to be fixed at
5000 ivreS.
1t ordered also, that bank notes should be re-
duced as 10 to 8, but on the first of July they
should be further reduced-thOse Of 10000 livres
to 1900 liVres and so on monthly, at the rate Of
500 livres, until December when they should re-
main fixed.
This impOlltlc and disgraceful measure, was
followed with corresponding consequences; the
notes lost all credit, and the whole paper fabric
fell to the ground. Mr.. Laws system was over
turned; and, In It's ruin. involved thousands
who had converted their property into bank
currency, on the faith and declarations Of gov
ernment, which had sOlemnly engaged that,
whatever should change the coin, the bank
notes should always remain the same
Thus terminated Mr.. Laws celebrated bank
Ing system; which, though founded on principles
calculated for stability, could not resist the per-
ady, or folly, Of deSpOtic government. But
France had reaped some advantage from It's
establishment, In her agriculture, her manufac-
lures and commerce; and the people had be-
come more industrious and better acquainted
with the principles OF trade, by the abundance of
circulating medium which 1t produced.
You perceive therefore, my dear sir,
that the trouble was not with the paper
currency, or with Mr.. Laws system, but
it resulted from the pertidy of the gov
ernment, and this was brought about
through the influence of the advocates
Of metallic currency who found their
business Of drawing interest, and specu-
lating in Hcoin seriously interfered with
by Mr. Laws system. And thus you
will find In ell history, that it is the gold
and silver which alwaYs does the mis-