The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-03-27
LESSONS FROM HISTORY,
METALLIC MONEY AND PAPER
MONEY.
One the Destroyer and the Other
the Savior of Nations.

I'VE copy from the indianapolis
NoncOnfOrmist some extracts from
| another Of the valuable essays OF
Hon. John Davis, of Kansas, M. C, upon
the history of money. They should be
read by every voter.-EDIToR REPRE-.
sENTATIvE.]
| Money is war power There are
| two great war powers known among
| civilized natiOns-the sword and the
purse; by the sword is meant that
physical force which overcomes an
enemy in the field; the purse is that
power which equips, subsists, recruits
and pays the fleets and armies.
Among savages there is much of the
sword and little OF the purse. AS a
rule the purse power increases as
civilized methods are adopted. Mon
ey, as war power, need not have in-
trinsic value. 1t has been proven time
and again that modern wars cannot
| be prosecuted with intrinsic money
as support to the armies.
l call attention to the following ex-
amples of money as war power.
|. The history of the republic Of
Venice is history of continual war
on land and sea. Venice was the
greatest commercial nation of the
earth for centuries, and it's maritime
wars were necessary for the protection
of it's extended commerce in every
quarter of the known world. When
intrinsic money failed to meet the
| monetary requirements of the repub-
lie, a book credit or inscription money
was adopted. This inscription money
had no material value whatever 1t
was not redeemable in coin or bullion,
and there was no pretense that it
| would be SO redeemed; but it was re.
| ceiYeable in the revenues of the gov
ernment, and legal tender for all
| debts. The legal tender quality, in
the language of DR.. Franklin, was
| of "greater advantage than coin re-
| demption. For 600 years that paper
credit money ruled 20 per cent above
coin. During all that time there was
not money panic in the country.
Venice became and remained the CEN
! ter Of commerce and the clearing
house Of the world. This is the long,
est and most satisfactory continuous
financial experiment recorded in his
tory, and it proves very conclusiyely
the superiority Of functional or fiat
money, over intrinsic money in times
Of war.
2. When. at the beginning of the
American revolution, coin, or intrin-
sic money, failed, our fathers had no
resource but paper. They could print
paper and call it money, but they
could not receive it in the revenues of
the government, because the old con-
federacy did not collect revenues.
They could not endow it with the
quality Of legal tender, because the
old confederacy was not sovereign
government. They could not even
make it redeemable in coin, as there
was no coin to be had. Coin is always
absent when most needed. 1t was
rudely executed and easily counter
feited, hence in practice must be un-
limited in amount. People were ex-
pected to take it as a matter Of pa
triotism. This was the only founda-
y
for five years it met the requirements
of the country, and Mr.. Albert Gala
tin afte rwards spoke Of it as follows:
s"The paper money carried the
United States through the most ardu-
Gus and perilous stages Of the war,
and, though operating as a most un-
equal law, it cannot be denied that it
saved the country
Ii the American colonies had de-
pended on coin money as war power
they would have remained subject to
the tyranny Of King George. Amerl-
can liberty would never have been
born.
3. When, in 1897, money of in trinsic
value failed in England, the bank
paid out it's last silver sixpence, and
the nation was on the verge or ruin.
A Daper money not redeemable in coin
was adopted. 1t carried the country
triumphantly through every crisis,
conferring on the empire a prosperity
and glory unequaled in ancient or
modern times. On this subject, Sir
Archibald Alison says:
sit is in these moments OF pubic
and private suffering that the paper
circulation steps in to sustain public
and nriyate credit during the interval
when national industry has been para
lived by the disappearance OF the pre-
cious metals from circulation.
Rnt for its aid the empire would GER
tainly have been destroyed.
Had bank notes been rendered scarce
then disappeared, the nation and an
it's trading classes would nave Deen
bankrupted, and we should long since
have been province Of France"
4. When, in 1913, during the wars
of Napoleon, gold utterly failed to
meet the needs of the allied armies on
the continent of Europe, England,
Russia and Prussia issued a joint pa
per money, which supported the arm,
les, broke the power OF Napoleon ana
saved the continent. The late Judge
Martin, in his work on The Money OF
Nations" says:
, "It met the emergency as coin could
|, not"
+ Mr.. Alison says:
1T passed as cash from Kamschatka
, to the Rhine, and brought the war to
a successful issue. WlthOut
this paper money the vast armame nts
: of the allies would have been dis
| solved for want Of funds for their sup
: port" D.A.,,;o.
, when cold left the field, there were
| three kinds Of non-metalic war mon
!, ey. which stood the shock Of arms te
S the end. The revolutionary govern
= r,o,t of tho Snuth issued the best pa