The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1895-06-19
THE LEGAL TENDER QUALITY.
Pro,f. Laughlin.l

(Prof. Laughlin.)
The demand for a particular kind OF
money created by governmental action Is
doubtless one on which there may be
an honest difference OF opinion, but II Is
clear thai there has been much misundsr-
Standing about 1t. Not infrequently II Is
believed that dhe free coinage of a cer-
tain meIaaa fixes it's value, but experience
has Shown how untrue this Is. Free coin
age OF silver or gold does not necessarily
Imply a demand, since the cheaper of
the two wil come into use, and so the
demand wlll be for only cne of the two.
But the influence of the government al
action is supposed to be exercised on the
value of money by making the money a
legal tender for all debts, public ana
private. On this quality certainly mucn
reliance is placed by those who think
value cam be created by the action of the
state.
At first flush 1t might seem that there
Is q good deal in the belief. For, If no
debt can be legally satisfied except by a
legal tender money, then there must be
a demand for such money 10 the extent
that money Is used in paying debts. Very
true; but THAT Is not a demand to any
great extent, as a moments reflection Will
show. The cases where indebtedness is
paid or[y after resort to law are far
from numerous. Voluntary payments are
the rule In most settlements, because
every one knows THE force resident in the
law and does not appeal to It, The mere
existence Of the law does not imply that
everyone will be obliged to appeal to the
courts The mere knowledge and fear of
The law makes resort to the law unneces-
sary Hence Obligations are constantly
being paid Off In the way most saltisfac.
tory to both parties. There Is good reu,
son for this in the fact that as every
business man Is constantly discounting
and borrowing, he carefully wishes to be
known as one who makes repayment
readily and In that kind of money which
satisfies business honor. Not Ito do so is
TO ruin his credit and make future loans
difficult.
Consequently, attaching the legal ten
der power to money does not give 1t the
extended use generally supposed. IL there
are any other kinds of payment. The
only effect 1t has, when there are several
Kinds OF legal tender money, is to cause
the cheapest and poorest to be generally
used. This was found to be the case
also with free coinage. since free coinage
ltsef did not prevent the dearer money
from disappearing. In short, legal tender
uses are merely convenience in disputed
contracts, where repayment is contested
and the courts are called in to enforce
legal payment. To suppose that making
money legal tender forces II into use on
all transactions is like supposing than a,
legal penalty against burglars Is needed
TO ksep an Citizens from house-break-
Ing.
Nor can the legal tender power. In
ltse.f support the value of any money,
Take away the quasi-redempion fea.
ture, when several kinds of money are
equally Cegal tender, and let the legal
tender money stand by itself. Then n
VIII be seen how futile It is as a. support
Ing power. From 1862 to 1879 the green>
backs were full legaa tender for all
debts, public and private; but, as there
was no reserve behind them, NO value on
which they could lean but the possibility
OF future redemption, their value depre,
ciated until they were worth only S5 or 10
cents en- the dollar. The legal tender
power did not keep up their value, be-
yond the value associated with them by
The hope that Nhe promise on their face
would be Kept some day In the future.
In France the penalty for refusing 10
take the asstgnats at par was hanging,
and yer their value deprecated so that II
took basSetful OF money to buy can
ne And so 1t has been in adj the history
'f money And so NJ Is today in silver
using counties. Where silver is the
oEly legal tender money, Its value rests
On IT'S own intrinsic worth. The legal
lender power of Mexican law does not
give a Mexican silver dollar amy addn-
ilonal value beyond its intrinsic worth In
me markets OF the world. 1t is today
~orM one-half Of an American gold doh |
ar The American silver dollar is MAIN
aimed at par with gold by system OF
',edempdon In gold, not by the legal ten
Ter power pure and simple.