The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1892-05-19
PAPER MONEY.

" y =
why the First 100000, 1000 OF
Treasury Notes. Were
Good as Gold.
Why the Next $4OO,OOO,OOO
Were NOt-The Reason
Succiently Stated.
Sir: In the Hon. Leland Stan
ford's speech in the United States
senate upon his scheme for loaning
money by the government upon
real estate, / find the following:
sSDuring the war Of the rebellion
the government issued many mil
lions Of paper money. The first
issue of sixty millions was good
for all debts, public and private.
This did not depreciate at all, and
was good or preferable. to coin,
while the other money, not so re-
celvaDle, became very much depre-
ciated." " [ had the above thrown
at me upon the street few days
ago by an Alliance man. Now, is
it not true that we could pay
debt during the war and since with
one issue of greenbacks as we'll as
with another? If it is true that
the first sixty millions did not de-
preciate, was it not because we
had sufficient gold back of them to
keep them at par? 1t is the first
time / have heard that statement
and will Mr.. Horr please explain
fully all about the matter?
~ JOHN f. COULTER,
Russell Springs, Kan, May 4.
The statement of the fact in
Senator Stanford's speech is liter
ally true; and yet the inference
which he draws is entirely false.
Mr.. Coulter asks a simple ques-
ton: g Could we not pay debt
during the war and since with one
issue of greenbacks as we'll as with
another?" Certainly we could.
There has never beer more than
one kind of greenbacks. Mr..
Stanford misled our correspond
ent by using the term "paper
money" A simple recital of the
facts will make this whole question
easily understood by every one.
Early in the war the govern
ment became embarrassed for
funds with which to meet it's in
creasing daily expenses. At that
time the only money in the United
States was gold and silver coin and
the notes of State banks, over
which the government had no con-
troll. Our statesmen were strug-
Cling for means with which to
carry on the war. The first issue
OF paper money, to which Mr..
Stanford refers, was known as
Treasury notes. They were not
isgreenbacks'' at all. The govern
ment did issue about $50, 0oo,oo
of those Treasury notes." They
were made receivable for all pub
lie dues, and were always re-
deemed in gold when presented
for payment: Experience soon
showed that this paper money was
used almost entirel " for the pay
ment of custom dues and other
taxes payable to the government.
The expenses of the nation were
over 100000 per day.. It was
not a difficult matter for the GOV
eminent to keep 100000, 1000 at
par by such an arrangement.
1t soon became evident, how
ever, that this $50, 100000 was
but a drop in the bucket as COM
pared with the actual needs of the
government. The problem at once
confronted our patriotic statesmen
how to provide for more than
$500, 100000 each year over and
above the actual receipts of the
government. It became necessary
in three years to raise not $50, 000,,-
600, but over $4,000, 100000.
While the government could
keep 100000, 900 Of paper money
at par, no sane man will assert that
they could have kept thirty times
that amount. The plan finally
adopted was that of issuing GOV
eminent bonds and selling them in
the markets Of the world; and, in
addition, the issue of our present
greenback money. In order to
float our bonds they had to be
made payable in coin, and the
government had also to provide
for the payment of the interest on
such bonds in gold. The green
backs were issued with the under
standing that they were not to be
redeemed at once. Indeed, the
government did not attempt to re-
deem them, but treated them as a
time loan not bearing interest.
4