The times. [volume] (Richmond, Va.) 1890-1903, 1892-12-18
THE nrspaTCH on DELUsION.

Under the caption THE Local Currency
Delusive." the Dispatch showed yester-
dav that II is itself victim of number
Of strange decisions, or else The Times
is.
Delusion No. 1 consists in the Dispatch
supposing that there is some sort OF
analogy between the demand Of 1878 for
an unlimited issue Of greenbacks, ana the
present demand that the State banks
shall be permitted to issue their circu-
Iatlng notes. if they see fit TO do so.
But the Greenbackers' demand was for
the issue Of Treasury notes that should
be legal tender in payment Of debt The
present demand is simply that banks
shall have the same privilege that indi-
viduals have, that is, liberty TO issue their
promissory notes 10 such persons as are
willing to take them. The difference Is
the difference between the Car G. Russia
and a beggar in the streets Of st. Peters
burg.
Delusion No. 2 is in assuming that the
notes OF State banks will certainly be at
a discount compared with gold, and, this
being so, that they will certainly drive
all other currency away upon the we'll
known principle that bad money always
drives out good money-what we call
Greshams law. 1t says Financial law
teaches us that bad currency will drive
out a good currency or. in other words,
ont ha
but the worst, money or currency that he
has"
But the Dispatch must bear in mind
the fact that it takes two to make bar
gain. A man can't pay cut unless some
ether man will receive. The notes to be
issued by State banks would not be legal
tender for debt, so that no man would
have to receive them unless he pleased.
Gresham's law-the principle that makes
a bad money drive out good money
applies only 10 money. 1t has no applioa-
tiol whatever in any other case. II
man can pay his debt with chear money
ne will certainly do It. But no creditor
will receive a cheap money unless the law
compels him to receive it. The principle,
therefore, Of cheap money driving out
dear money has no sort Of place in any
discussion concerning the issue Of notes
by State banks, because those notes will
not be money, or possessed Of any Of the
functions Of money. They will be nothing
but promises to pay money, differing in
no respect whatever from merchants
negotiable note promising TO pay money.
Delusion No. g. The Dispatch says:
IF the theory of which we write be
true, then the American currency which
the financial world refuses TO accept as
good is better than the currency which
the financial world does so accept"
When the Dispatch speaks of "Ameri-
can currency" we understand it to mean
what we call Yeenbacks-United States
legal tender Treasury notes.
Now, we will restate the Dispatches
argument, but in a slightly varied form.
and it might be put thus:
Because the laws of the United States,
which are supreme within the United
States, make greenbacks (Which have no
element Of money within them money
all over the United States. therefore they
should be preferred as money in England
and France to gold and silver. although
they have no quality OF money in them
selves, and the laws Of those countries
make no attempt to confer on them any
of the qualities of money" Could a non
sequitur be made palmer? Unless The
Times is under a deiusion, the error here
and the error that runs through the Dis
patch's entire article is in compromising
what we call currency with money. Cheap
money drives out dear money, but depre-
ciated currency cannot drive off money.
because creditors will not receive II IN
payment Of debt when they have the
right 10 demand money. There is moth
ing whatever in the proposition that II
would be better for the neighborhood
II a discount forced It's local currency
60 stay at home and serve there as q
substitute for money. which tends to
prove that the people OF France ought.
logically. to accept and use as their money
the American 0reenback. and we insist
that 1t IL the Dispatch which rests under