The herald., 1895-06-02

markets OF the world should be an
xious above all things to see it sud-
denly become worth say GO or 20 or 80
ore even 80 cents in value. even though
it be at the expense OF his fellow coun-
trymen. But that hardly seems a reason
for giving heed to his fattering misrepre-
sentations. Rather should we closely
examine into his plausible arguments,
and in so doing we shall find that the
cry for free silver is a cry for cheap
money! better than for inconvertible
paper currency. undoubtedly, but only
better IN so far as 80 cents is better than
nothing, and that the adoption of any
such sweeping measure will in the end
only benefit those who own the silver
mines, at the expense of the government,
and work immeasurable mischief to the
great mass OF the people at large.
The pernicious delusion that the gov
ernment has the power to create money
is traceable directly to the legal tender
act OF 1862. Previous to that time the
American people, in common with those
OF other enligh,ened nations, believed
that the sole function of government in
relation to money was to certify to the
weight and purity OF the metal contained
in it. This view. which. it is scarcely
necessary to say. has been shown by the
experience OF all civilized countries to
be the only sound one. was completely
upset in the minds of thousands OF unin-
structed people by the Issue OF the legal
tenders and the subsequent decision OF
the supreme court upholding the right
OF congress to make such issue. The per-
nlcious doctrine that anything which the
government might choose to stamp as
money-papeI, or silver. or nickel. or cop
per--became lpse facto money for the
amount named on its face, obtained so
firm lodgment in the popular mind tn at
calls began to be heard from all quartz rs
for the liberal Use of government money
in almost every form eXScaept-gold.--
Century Magazine. March, 1891.
70 recall the circumstances attending
this issue and the general effect which
it produced on the financial condition OF
the country We have to go back to the
year 1862. AT that time the people of
the United States were engaged in the
great civil war. In the field nearly
million men were arrayed against each
other. while the government had to meet
daily expenditure of fully So. 900. 900.
The public debt, which on July 1st, 1860,
was y64. 900, 600, and which "a year later
had only reached the sum vf 500, 600, 900
on July lst 1862 amounted to the enor-
nous total of 1924, 600, 900.
When congress met in Decem ber 1861 1t
was apparent that the volume of currency
in the country was not sufficient for the
enormous requirments of the public ex
penditure. The banks could neither pay
coin to the government for bonds nor
dispose of them to their customers for
specie. The weaker institutions were al
ready tottering and the stronger ones
feared a crisis which would result in uni
versal disaster. They met in convention
on the 9th OF December and agreed
upon suspension of specie payment
which took place the following day. The
government necessarily followed the ex-
ample of the banks. and the new year
began with the melancholy spectacle of
all the public and privat einstitutions of
49,.
promises with new ones''--Life of Abra-
ham Lincoln.
"A the head of the treasury was Salmon
p. Chase afterwards chief justice OF the
United States. who, possibly excepting
Hamilton, may be considered the great
est iina1cier IN the history Of this coun-
Try. The important laws which, as secre-
tary of the treasury he urged upon con-
gress he afterwards. as chief justice, de-
clared to be unconstitutional But what
other course was open to him? 1T was
estimated that $3.50. 00n. 900 was needed
to pay the expenses of the government
to the close of the fiscal yeal and the
treasury had means Tor meeting the
drafts of the government for less than
two months. In the world OF finance
as well as in the world of politics it
was generally agreed that the only re-
sort of the government was paper IN oney.
Leading bankers throughout the U nited
States urged this upon the Sc cretary of
the treasury as the only practicable ex
pedient. The leading statesmen in both
houses OF congress were brought with ex-
treme reluctance to the same conclusion.
TO no one was this more painful than
to the secretary of the treasury.
''In both houses of congress the measure
received the most violent denunciation
on the part of those who proposed it. and
even those who voted in favor of it ex-
plained their votes in speeches filled
wi tin depreciation of the necessity which
demanded it. "(Life of A braham Lincoln.)
BY this and subsequent enactments the
government was authorized to issue over
$500, 600. 900 of United States notes not
bearing interest. payable at the treasury
of the United States. in denominations
of not less than five dollars. These notes
were to be received IN payment of all
debts and l demands OF every kind due the