The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-04-22
REVIVAL OF THE FIAT MONEY IDEA,


The Greenback convention which met
in this city March II. 1876 demanded
1.-The immediate and unconditional repeal
of the specie resumption act of Jan. IA,
1875, and the rescue of our industries
from ruin and disaster resulting from its
enforcement" The convention also de-
clared:
We believe that United States note,
BILE, demand, into United States obli-
cations, bearing rate of interest not ex-
dollars and exchangeable for United States
notes al par, will afford the best circulating
medium ever devised. Such United States
notes should be full legal tender for all
purposes except for the payment of such
obligations as are by existing contracts
made payable in coin.
It was further demanded that coin
should only be used in payment of inter-
est on the national debt, and that the
government should issue an unlimited
amount of the notes above described.
which were not to be redeemed at all,
and only convertible into interest-bear-
ing bonds, which, in turn, were convert
ible into notes.
Wild as this scheme was, it had a
great many enthusiastic supporters. who
believed that the business depression of
that period was entirely due to the pros
pective resumption of specie payments,
and that an unlimited issue of irredeem-
able paper money would, to use the Ian
guage of Mr.. Cheadle in a recent letter
on silver. start UP our idle industries,
give employment to labor. advance the
price of our staple products, thereby
bringing prosperity to American agri-
culture, the basis of all true national
prosperity The Greenbackers of that
day secuted the idea that it was nAses
sary for money to have any intrinsic
value. 1t was not intrinsic value, bur
the fiat of the government and the legal
tender quality conferred by law that
made money.
The present demand for the free coin
age Of silver by the United States at
the ratio of Is to / is revival of some
of the essential features of the Green
back movement There is the same as
sumption that business and prices are
depressed by a scarcity Of currency,
when. in fact, the volume of currency
and the amount per capita to population
are greater than ever before; there is
the same claim that an unlimited in
crease of the volume of currency would
cause revival of confidence and trade,
and practically the same contention that
intrinsic or commercial value is not an
essential quality of money. The Green
hackers claimed that the fiat of the
United States government and the legal
tender quality could float an unlimited
volume of paper dollars. and the present
advocates of free silver coinage at 16 to 1
claim that by the same means an I'M
limited number of silver dollars contain
ing only a little more than fifty cents
worth of metal could be maintained at
par with gold dollars containing hum
dred cents worth. The underlying prin-
ciple of this contention is the same as
that of the fiat money advocates of
twenty years ago. 1t only needed a
thorough understanding of the danger
Gus tendency and fatal possibilities of
the greenback imitation scheme to lead
the people to reject it, and it will be the
same with the 16-to-1, go-it-alone free
silver coinage scheme