Martinsburg herald. [volume] (Martinsburg, W. Va.) 1881-1920, 1892-03-12
WHAT soEr MONEY DID

" sA4O SSbCAeA Vi OtttiOuS Vi
" fiat. which is to be redeemabie Meth.
er in coin. land nor products. but Is to
Be based on T" the credit and resources of
the nation Their representatives in
Congress are introducing bills for the
printing and distribution of this stuff,
if loaned out TO farmers and planters ON
the scale they propose would be as album
dant as the leaves in June and as yalua-
bic. for while few millions of it might
be fioated by the government. if receiv
ed by it for its dues, larger issue would
be waste paper.
One of the Alliance leaders said that
he has = not heard single valid argu
ment against the subtreasury scheme
which contemplates h,,od of = fiat.
which is To be convertible into nothing
and which will be therefore exchange
able for nothing. The best arguments
against these wild projects are facts
and if this Alliance man were familiar
with the history of this country he
would know dozens of forcible answers
to his follies.
There have been various attempts in
this country to run its business with pa
per money, which. while pretending 10
be redeemable in specie. was not. One
of them was made during President
Jackson's administration and plunged
the United States into financial Difficult
ties. the effects of which were felt for a
quarter of century. The character of
the first United States bank. the child of
he creative genius of Hamilton. ex.
pired in 1911. That of the second one
was granted in 1916 to run twenty years
In 1880 the bank was furnishing a cur.
rency which was readily accepted
throughout the Union. Its notes wer,
at par every where, and. in the western
and southern states. commanded a slight
premium over silver. because they would
be shipped at less expense. These notes
were not a legal tender. but the people
knew that the bank could and would
redeem them in specie whenever pre-
--nted. The bank had the government
deposits, and kept them safely.
President Jackson, that pugnaciou,
animal "as Gallatin called him. had q
onter, unsuitable prejudice against the
Bank of the United States. He could
not :" run " it as he did the government.
He professed to believe that it was u
Federalist institution. He had all the
prejudices of the Jeffersonian Demo-
crats against anything which was the
annual message the President indicated
ms hostility to the bank. In 1889 he
vetoed a bill for extending its charter.
And on that occasion Senator Clayton
laid
Ia less than four years the pecuniary
distress. the commercial embarrass
'nents. consequent upon the destruction
Of the United States Bank. must exceed
anything that has ever been known in
our history.
But neither the constitutional argu-
ments of Webster nor the prophecies OF
Clayton could pass the bill over the
veto. The following year the govern
ment deposits were withdrawn from
the bank by the Presidents order ana
we're distributed among the state, OF
pet " banks run by good Jacksoniar
Democrats. The withdrawal of the de
posits compelled fine United States bank
to curtail its discounts. That caused a
stringency in the money market. Il was
claimed by the administration that the
bank acted as it did for political pur.
poses. and the secretary of the treasur y
directed the pet banks to make liber-
al discounts. Jackson wanted them to
issue notes freely" They do SO gladly
and began to
Pour fourth with prodigal hand their
spurious issues of Taper money-those
pictured shadows that bewildered the
brain. toxicated the hearts of the PEG.
pie. and drove them into the maddesl
schemes of speculation and extrava
gance.
Jackson's state sovereignty banking
scheme ran along swimmingly for IA
time. Money was abundant. prices we're
going up and all felt rich. Suddenly
the people began to feel uneasy. They
went to the banks. presented notes
which said on their face that they were
redeemabls in specie, and asked for the
,oin The banks did not have it. Then
the bubble burst. The banks went
Town. those which had the government
deposits included, and the terrible panic
f 1887 began. All the predictions which
Webster had made in the series Of re-
markably able speeches which he deliv
cred in opposition to Jackson S financial
madness were verified.
There must be some of the Alliance
men who are old enough 20 remember
the panic of 1887 and its commercial
financial. and political effects. The
country discovered that what it had been
regarding as money was worthless.
Hundreds of thousands of business men
went into bankruptcy. A state Of intol.
cradle distress existed from Maine to
l. ,uisiana. The political revulsion was
20 great that in 1910 General Harrison
carried three-fourths of the states, in
Guiding Mississippi and Georgia.
There were six bitter years of intense
suffering from 1887 to 1913. when the
state of things began TO improve. But
from the irst-named year. when the
state banks Of issue were abolished and
the national banks were established. the
country was afflicted with jackson 8
state sovereignty banks whose notes
we're sometimes worth par at home but
never outside of the State in which they
we're issued. and which were worth all
the way from five cents on the dollar
up. their value varying with their pros
pect Of Icing redeemed in coin.
President Jackson struck down the
safe. uniform, constitutional currency
which was furnished by the United
States bank and opened the door to the