The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1892-10-17
4" Cheap Money"

banks and the collapse of the spe-
Gle payment systems at various
times than from all cheap
money" issues, and l referred to a
few conspicuous failures that had
taken place in America as a par
tial proof of my claim, leaving out
the thousands of failures scattered
over the country between the more
general failures, leaving unnoted
the many gold bank failures on the
Pacific Coast the past forty years.
will now cross to Europe and
note a few important gold bank
failures some of the most i'm
portant banks known to history,
with their most conspicuous
failures.
The Bank of England failed in
1877, 1887, 1847, 1857 and 1866 !;
that is, it closed its doors against
its note holders, contrary to law.
1t could not redeem its notes as
the law required.
But to avoid further financial
disaster to the bank, to the Gov
eminent and to the industries, the
Government came to the aid of the
bank and granted the bank the
right to issue an unlimited amount
of irredeemable notes, and the
Government made them a legal
tender. Business Immediately re-
vived, and the people of Great
Britain increased in wealth and
prosperity more rapidly than at
any other period in her history.
The public revenue doubled in
value. The loans negotiated by
the bank for the Government dur
ing this first suspension of specie
payments amounted to 935O,0OO,-
900. During this period the Bank
of England was tower of strength
to the Government. But what,
after all, enabled Great Britain to
surmount all difficulties and come
off victorious in one of the greatest
contests of modern times was the
wonderful development of her pro-
ducing forces occasioned by the
abundance of money put into cir
culation by the war-irredeemable
paper though it was. All classes
of society participated in the gen.
eral prosperity which prevailed
during this twenty-three years of
irredeemable "cheap money"
No one was so blind as not to be
able to see that Great Britain was
enabled, by her cheap money alone,
to carry on her wars on the Con-
tinent, and that by it alone were
the people enabled to make such
remarkable progress in commerce,
agriculture, manufacture and war.
We may reap instruction by a
partial summing up of the cases
cited. That of America before the
greenback issue, the Government
and the people were in financial
straits-gold and silver had left
the channels of trade. The banks
had all suspended specie payments
except on the Pacific Coast; cur.
rency for business was confined tc
notes of broken banks; no gold OF
silver coin could either be bought
or borrowed or collected as tax
from the people business de
preston was heavy upon the
people; all were suffering anC
and no relief in sight, and the same
may be truthfully said Of Grea
Britain before the Bank of Eng
land closed its doors, 1897, agains
its patrons and note holders. Thi!
suspension did not take place un
til the bank had refused all dis
count to it's customers, even on tn
best sixty day commercial bill
secured by government securities
Bear in mind, the financial troubl
in both countries was caused b.
the failure of numerous bullion
banks, not "cheap money" issues
Both countries took nearly tn
same means to relieve their finan
cial depression. The Bank of Eng
land notes were made legal ten
der by the Parliament of Grea
Britain. That of America was re
lieved by the issue of the greer
back and other treasury notes.
After these legal tender issues c
irredeemable "cheap money" bus
ness Immediately revived. Me
were encouraged and took up the
broken threads of business, an
general prosperity was enjoyed b
the people of both countries; Ems
land enjoyed it twenty-three year
and America eleven years; the
continued prosperous until the bu
lionists got in their work
destruction against the legal tel
der cheap money. Then it was tn
people suffered, physically, mel
tally and financially.
Tt will be observed, the time
and failures referred to above, forl