Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1892-03-23
THE ELEMENT OF oonplD5McE

can Banker and rejected Il II very svIdeAa
that the editor Of that journal fssrs 70 e1ve hD
readers any views opposed 70 his 0Wn upon IL
question of money.-Editor Advocate.
To the Editor Of the American Banker:
In your issue of January %, 1904 10
the course of an editorial uHdGs
the caption What Constitutes Good
Money" you say:
I'VE think we can demonstraAe n
the light of past and present experience
that the one essential element which
must enter into good money, Is the con-
fdence of the people who accept 1t In
exchange for goods, labor, or any other
thing of value. By way of illustrating,
taking the various forms of currency
issued by the United States to-day, we
find that $S4s, 600, 900 of notes, common
~ called 'greenbacks,' freely pass from
hand to hand, although it is well known
that $246, 900, 900 of these could not be
redeemed in coin by the government II
the whole were presented to-day for
payment. Again. about S170, 600, 0oo.
more or less, of national bank currency
have but about S6,000,000 of law.
full money deposited in the United
States treasury for their redemption,
so that in these two issues alone we
have over 400, 900, 900 of uncovered pa
per money freely circulating through
out the land, without dollar in the
treasury now for their redemption, yet
equal In purchasing power. dollar for
dollar, to any gold dollar piece bear
ing the government imprint. Further
than this, there are in circulation also
silver certificates to the amount of say
$500, 900. O09 more secured by the deposit
of silver coins worth actually, if melted,
only about IS cents on each dollar
piece. Is it to be supposed for an in
slant that these various forms of money
would be accepted at current rates Of
purchasing power, were it not for the
confidence OF the public in the ability
of the issuing party ultimately to re-
deem the entire issue at full value. The
reverse of this proposition is proved by
the facts of the financial history Of
this country, which show the varying
rates below par at which currency,
issued by the state banks before the
war, circulated; the heavy discount
varying from say twelve per
cent to fifty per cent. at which
United States legal tender notes
were accepted by the people during the
late war, when the black shadows of
doubt as to the ultimate result of tho
mighty struggle overcast the clear sky
of confidence, and how for thirteen
long years after the close of this strug-
gle lack Of faith in the ability of the
nation to redeem it's large and various
promises to pay lessened the purchas-
ing power of paper money and held
this below the par of gold. How often
do we see the like of this illustrated in
the case of a run by depositors upon Q
sound bank when suspicion has been
aroused through some idle or malicious
rumor as to its condition, and by the
opposite case where rotten and dis
honest institution suddenly closes Its
doors owing millions to confidinR cred
| itors-"
VIII you kindly allow me little of
your valuable space in which to offer a
few criticisms upon the foregoing
| statements.
In the first place confidence" is not
an intrinsic quality of money, or indeed
Of any other substance. Nor does it
inhere or appertain to money. Conf
dence Is an emotion or phase of the
human mind But it is not an original
or inherent attribute of mind, but
purely the result of education, even as
the conscience is a mental comparison
| of actions contemplated, or already
performed. with the standard of right
and wrong to which one has been edu-
Gated. II follows, therefore, that the
| possession, or lack of confidence, being
the result of education, Is not prima
facia evidence of fact, as one may
possess confidence when it should not
exist, or lack it when there is e-ery
reason for its existence, just as tho
heather, in all good conscience,
worship idols.
am glad to see that you recognize
this principle, and illustrate it by cit
ing the foolish confidence the people
possess in the ability of the govern
ment ultimately to redeem over $780,
900, 900 of uncovered paper money
without dollar in the treasury now
for their redemption" Your argument,
and, indeed, the only true and correct
argument is, that anything the people
have confidence in is good money
simply because it fills all the require
ments and performs all the functions
of money. And yet, as you yourself
show, the peoples confidence is now
misplaced and our present paper money
is fraudulent pretense, because it
proposes to perform the impossible,
e., redeem itself in gold coin. I, for
one am curious to know why there
exists any necessity for this fraudu-
lent pretense and what reasons can
be given that will bear the light of
investigation. 1t cannot be that men
| 80 cold Tn hot
case they would not as they do, imme.
diately part with it by investment or
purchase. Besides, in case they did
want it as a.commodity, or as wealth,
then, as there is certainly not to exceed
$500, 900, 600 in gold, in the United States,
the government even if it owned it all,
would fall short S17O. OOo, Ooe of redeem
ing the paper money, including the ma
tional bank notes, as well as 500, 600.
600 required to put at gold par the $500,
600, 900 in silver represented by certif-
Gates and treasury notes, to say moth
ing about the United States bonds.
And if men should suddenly concl ude
that they did want the gold to hoard as
wealth, not only would the United
States, the richest nation on earth, be
bankrupt. with about one billion dol
lars liability, but according to the en-.
lightened dictum of ninteenth centary
civilization, we should not be e.ole tc
have any more money.
Now allow me, Mr.. r,nitor. to poin
out what, in nv hrmble Judgment, i
the, rock upor which we split-th
weak POM in our present monetar.
sys1eD We issue. as money, promise
! paw, instead of promises to receive
= These promises to pay, In their las
\ analysis and final interpretation ar
/ construed to be payable in gold coiE
d If anyone wanted gold they would b
worthless at the start The people,