The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1892-04-22
THEN AND NOW.
The Financial Problems of Thirty Years
Ago Were Different From What They Are

Ago Were Different From What They Are
Now.
The republican party inserted in the
legal tender act Except" for duty on
imports which enabled the holders of
gold to run up the price and depreciate
the value of the greenbaclxs as COM
pared to gold. The capitalists were al
lowed to buy government bonds with
these deprecated greenbacks and then
the republican party made the bonds
payable in gold and in order to prevent
a kick resumed specie payment by what
was virtually repeal of that little Sex
cept" and greenbacks came to par with
gold Just as soon as they were made
payable for import duties.-Wichita
Beacon.
This is the old greenbacker-people's
party harangue except for the ridiculous
misstatement at the end, which peO-
pies party papers and speakers are too
well informed to make. If the Beacon
will look at legal tender note il will
see that the exception clause is still
there undisturbed. But the legal tend
ers are. as the Beacon admits, at par;
consequently it was not the ''excep-
ton clause" that caused their depreci-
alton.
The Capital has no desire to defend
banks and capitalists, but if the Beacon
will study the debates in congress of
just thirty years ago it must realize
that the interests of banks and capital
lists were entirely out of consideration
when the legal tender bill was intro
duced. 1t was conceded at that time
that some radical measure must be en-
acted to provide money to meet the war
expenses. The treasury notes of 1861
were redeemable in coin, but when pre-
sented for redemption they had to be
declined. The treasury had no coin
with which to redeem. Secretary Chase
heartily indorsed and advocated the
legal tender bill as necessity in order
TO provide him with the means of meet
ing the enormous expenses of the gov
ernment. For the two years of 1868
and 1864 the disbursements of the gov
ernmcnt exceeded the total diSburse-
ments to that time from the adoption of
the constitution in 1859. r..- ...
Mr.. Stevens put the issue. The gov
ernment, he said. was reduced to a
choice between two alternatives. 1t
must either throw bonds on the market
at six or seven per cent. to raise $780,
900, coo. or it must issue legal tenders
not redeemable in coin, but fundable in
comparing bonds. 'The highest rate
at which we could sell our bonds, he
affirmed, would be seventy-fve per
cent, payable in currency, itself at
discount, entailing a loss which no na-
ton or individual doing a large bust
ness could stand for single year"
The debates show that from the first
there was no thought on the part of
anybody that the bonds should be re-
deemable in anything but gold. The
legal tenders could not be based on coin,
for the government had no coin with
which to redeem them. The next best
thing was done, and they were made
convertible into bonds redeemable in
coin after five years and payable at the
end of twenty years. Thus it was ex-
pected that the legal tenders might be
kept at par.
The Beacon's theory that the legal
tenders should have been payable for
imports is rank nonsense. Imports were
the one great source from which the
government hoped to get gold to pay in
terest on its bonds and sinking fund
for their ultimate redemption. The
Morrill, tariff act and legal tender Sex
ception clause" enabled us to get large
income in gold from foreign goods and
built up home industries which had
been woefully neglected under the reve-
nue. tariff in force from 1876 to 1861.
Under that revenue tariff we had sup
piled rich market for England's fab
rics and iron and from 1850 to 1860 our
imports SO far exceeded our exports that
we shipped abroad $3.50, O,OO0,O 900 of gold
and drained the country of coin SO ur-
gently needed when the war broke out.
Banks and capitalists are not gener-
ally inspired by lofty sentiments, but it
is due to them to say that, whether for
love of country or for self preservation,
they did what they could to maintain
the governments credit. By the time
the original legal tender bill, 1862, was
enacted the funds of the bankswere ex-
hausted. The aggregate capital of all
the banks of New York, Philadelphia
and Boston was s1O5, 900, 900 and by 1862
they had already taken more than the
amount of their entire capital in the
governments bonds, paying coin. there
for. Their capital was fully tied up in
government securities and they could
have done no more if their motives had
been undiluted patriotism.
The statesmen of 1862 were confronted
with an entirely new and appalling
problem and they solved it as best they
could under the pressure of immediate
calls from the public treasury for relief.
After enacting the legal tender layv
they passed the internal revenue law.
BY this act the wealthy were heavily
taxed. Banks, railroads and telegraph
companies were taxed on their capital.
Incomes from 5000 to $40, 900 were taxed
per cent, and incomes over $4,000
were mulcted 1Oper cent. The Leading
millionaire of New York paid one check
of s4OO, 900 as one years tax under this
law. In one year ST3,O00,0 900 were
raised on incomes. All manufactures
were taxed per cent. This, certainly.
was not deliberate discrimination in
favor of the plutocrats as against the
masses of the people.
The more the subject is examined and
the debates studied from the Point of
view of thirty years ago the more
credit will be awarded to the men of
that era for the patriotic spirit tl1ey dis
played in debate and the courage and
wisdom with which they yacted-Capital-
Jerry is Cute.
Simpson is the one Kansas congress
man who fully appreciates THAT mis- re
election depends upon democratic votes.
He neClects no opportuuitytos show par