The Daily bulletin. [volume] (Honolulu [Hawaii]) 1882-1895, 1892-07-07
CHEAP MONEY.
SECOND ARTICLE.
EDITOR BULLETIN


EDITOR BULLETIN
This same writer upon "cheap
money" in the May number of the
Century Magazine, cites Rhode Isl
and's cheap money failure as an
argument against all attempts to
make cheap money profitable bot
toned upon land values, He says:
"At the close of the Revolutionary
War the people found themselves in
extreme poverty, and in their dis
tress the people turned to paper
money for relief, and the General
Assembly in May, 1878, passed q
law establishing a paper money bank
of one hundred thousand dollars.
The money was to be loaned to the
people upon the pledge of real estate
for double the amount desired and
must be paid into the treasury at the
end of fourteen years. Many made
haste to avail themselves of their
good fortune, and mortgaged fields
slrewn thick with stones and covered
with cedars and stunted pines, for
sums such as could not have been
obtained for the richest pastures.
The depreciation of the new money
began literally with its issue. The
act which effected its repeal fixed
the value of the bills at fifteen TO
one. This was the end -
The same writer continues: "Ev-
cry cheap money experiment that
has ever been made has resulted in
precisely the same demonstration,
and the same fate awaits all those of
the FUTURE This last sentence
seems rather too prophetic for one to
utter not properly endowed.
One would think that a mere refer
ence to the American greenback
would be sufficient proof TO show
that the writer referred to had not
fully digested his emphatic dcclara-
ton, that "every cheap money ex-
pertinent that had ever been made
has resulted in precisely the same
demonstration" as the Rhode Island
experiment. The American green
back certainly is not such failure,
and its present standing indicates
anything but failure, and there are
several other cases ON record of
cheap money issues which were not
failures. We may refer to them
further along.
The Rhode Island "Cheap Money"
scheme failed: LIST. Because the
State as well as its people was poor
and bankrupt, which rendered its
credit too shaky to have its notes
accepted in the community as money.
The same effect follows all bankrupts.
2ndly. The Act required that double
the amount of property should be
gwen as security for the sum loaned
but by fraud the amount loaned was
more than the value of the property.
3rdly. The Supreme Court had unan-
imously declared the issue unconsti-
tutional.
What other result than deprecia.
ton and failure should have been
expected for currency issued as the
"cheap money" of Rhode Island
was? The people were few and il
extreme poverty. 1t was not res
ponsible nation, merely small par,
of nation. 1t had no right to make
money; that right belonged to the
supreme government. Its Supreme
Court had unanimously declared the
Bank Act unconstitutional. So, look
ing at it from any standpoint, what
happened to the Rhode Island cheal
money was just what should have
been expected to happen.
So the Century writer's applica
ton does not prove that improved
real estate at one-half of its taXabl,
value is not good security for money
either from a Government or private
bank, whether the money secured b,
gold or greenbacks, dear money o.
cheap.
j. M. HoRNER.
ITO be COutinued.)