New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-01-04
FIAT MONEY AN AIRY DREAM.
A CURRENCY BASED ON NOTHING AT ALL
NOT WANTED.

MONEY pH1LosopIER OF PALMYRA. WIS.

MONEY PHILOSOPHER OF PALMYRA, WIS.
(From The Weekly Tribune December 80. 1917
long communication has been received from
c. F. Sherman of Palmyra, Wis. in reply 10
my article on Fiat Money" in The Weekly Tribune
of November II. Mr. Sherman has made his
answer long as to preclude me from printing
it in full. His former letter was much longer
than our space will usually permit, and this
is longer yet. In this second article the
writer attacks vigorously some of the statements
which l made in reply TO his first letter. |
shall select from his long communication those
portions which seem to most important: and
l shall make the extracts of sufficient length, so
that Mr.. Sherman will admit that | have in no
way Obscured his meaning or weakened his posi-
tion
The first selection is as follows
Mr.. Ilorr asks why latter quoting correctly from
the first coinage act passed by National Congress
establishing the money OF account and the unit Of
value as dollar l did give the statute chat
defines OF what the unit OF value shall consist. 1t
was because Congress did not make ii consist Of
anything The money of account does not consist OF
anything There is consisting TO il. II is true
that further on the act provides for the coinage OF
dollars, units 10 be OF the value of a Spanish
mdllcd dollar, the is current, and to
contain 371 416 grains OF standard silver, but
coin was a tangible representative OF that unit Of
the money OF account. ! wish that Mr.. IIorr would
eluded him. To encourage him in the effort, will
quote from the Opnim Of the supreme Court OF the
United states, delivered in December. 1870. in the
case of Knox Lee. and Parker Davis. by Judge
Strong follows:
1t hardly correct to speak OF unit Of value The
Constitution does not speak of it, 1t contempates a
standard for that which gravity extension, but
value is ideal thing. The Coinage acts fix Its unit
dollar but the gold silver thing We call dollar
is in the standard of dollar. 1t is Icp!c-
sentation Of H. There might have been piece
of money of the denomination of do lar. There never
was pound sterling coined until 1915, If We except
few coins struck in the reign of Henry VIII almost
Immediately debased. Yet II has been the unit Of the
British currency foT many generations
There no law passed in Congress with intent to
materaze the unit Of value prior TO that of February
I2 1873.
Mr.. Horr says that until The law provided what
should constitute dollar the word had no meaning at
all. When the statute provided that tie unit Of value
should be called dollar" and then also provided that
the dollar should contain 2313 grains OF pure gold
81 IA grains pure silver, then the word dollar In
SANITY meant something. This might be truo in
theory, but in practice there obstacle to OYER
come in the interim. We had been in the hab; Of
using dollars generations. We had Spanish mlled
dollars of the weight all ready to hand. when
the Government formed | cannot tell whence the
term came. The first coin of that that / have
heard Of Vas made by the Count of SclIck in Bohemia
In 1918. 1t ran through most OF the countries of
Europe during tho sixteenth century in different
forms and was here and the ready TO be applied
to the colonial currency. in the eighteenth century.
SHERMAN SOLUS AGAINST THE AUTHORITIFe.
I am frank TO confess that after reading the
FOREGOING statement I fail to see how Mr.. Sherman
has in any way weakened my proposition in my
former article? Still it is refreshing it
is unusual TO meet with an advocate of " Fiat
Money" who is bold and honest enough To he
consistent n follow his own theories their
logical conclusion.
Ny confidence in the corrcotne>S Of my own
views is greatly strengthened br tho fact Tint
the foregoing extract pr,scA,, Mr.. Nhclmans best
statement of lis Fiat Money theory" Having
once taken the position that il Is possible and
practical for our Government 10 establish a mOnc-
tary system based upon nothing and consisting
solely of a paper currency redecnable in nothing,
he has evidently ransacked his library in search Of
arguments and precedents for his justification But
mark the result. He fails to name q single en-
ample in the financial experience of any civilized
Government lie is not able TO fortfy himself by
the authority and conclusion Of any of the great
writers upon finance political economy.
He does cite a few sentences from decision OF
our Supreme Court but such sentences are hardly
in point and when the whole paragraph
used by Justice Strong Is given, and the statement
Of Justice Bradey's concurrng opinion 1t will
Sherman in the celebrated lcgal-tendcr cases
NJ Knox VS. Lee and Parker VS.. Davis. The
ARGUMENTS Of counsel the decision of tie majority
Of the Bench, ard the dissenting opinions, all
show the most extended research, the most
critical analysis, the broade-t, most catholic,
and most profound powers Of Judgment and ar
gument. But there is not q single PHI not
even a single sentence, i'll them when can ldifly
te construed as sanctiOning in the slightest DE-
9 Itaf
On the contrary, nowhere else in all the range of
English literature can there he found more
complete and satisfactory argument against the
use Of an ir:cdeeniablc currency. or more cN-
haustive and unanswerablc statement Of the facts
Of history OF the experience OF nations, ana OIL
the principles of political economy which justify
and compel the adoption of gold and silver as
the basis of every sound monetary system.
WHAT TIE COURT DID SAY.
ANY one who will read in Vol. 30 OF the
United States Supreme Court Reports the briefs,
decisions and dissenting opinions in this case VIII
say that the foregoing statement is not eNaS-
gerated. If Mr.. Sherman had quoted the entire
paragraph, no one could possibly have been mis-
led: nor could any one having clear compile
hension Of the difference between money Of clrcula
ton and money Of account be misled by the
quotation he made it.
l now quote the whole paragraph
Here might stop but viii notice briefly an
argument presented u support Of the position that the
unit OF value must possess intrinsic value. The ar
gurnent is derived from assim!latnS the constitutions
provision respecting standard Of weights AID me%s
urcs to that comforting the power 10 coin money ana
regulate Its value IL Is said there can be 40 uniform
standard Of weights without weigh, or OF measure
without length space: and are asked how any
thing be made uniform standard Of value which
has itself value? This is question forei IN to the
subject before U.s. Tie Legal Tender acts do not at
tempt TO make paper standard Of value We DO not
rest their validity upon the assertion that their emf sion
Is coinage or any regulation OF the value Of money.