The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-06-19
COLONIAL PAPER MONEY. !
JOHN FISKS ATTACKS ON 1T.
Is the Past the Rule For the
Present

Being DESTROYS of obtaining as much
light as possible on the subject of
paper currency" and other forms of
money. l should like to have the editor
OF THE Representative" comment upon
the following extract from a historical
work by Prof John Fiske, called The
Critical Period of America History"
9th edition, 1922:
by 1885, under the universal depres-
sion and want of confidence, all trade
had well-nigh stopped, and political
Quackery, with it's cheap and dirty REM
edies, had full control OF the field. In
the very face of miseries SO plainly
traceable to the deadly paper currency,
1t may seem strange that people should
now have begun to clarnor for renewal
of the experiment which had worked SO
much evil Yet so it was. AS starving
men are said to dream of dainty ban
Quets, so now craze for fictitious
wealth in the shape of paper money ran
like an epidemic through the country.
There was a Barmecide feast of eco
nomic vagaries; only now it was the sew
eral states that sought to apply the rem
edy. each in its own way. And when
we have thwarted the usage of this rash
legislation, we shall the better under
stand that clause in our federal cOnsti-
tuition which forbids the making of laws
impairing the obligation of contracts.
The events Of 1856 impressed upon mems
minds more forcibly than ever the
wretched and disorderly condition of the
country, and went far toward calling
into existence the need'ul popular SEN
timent in favor of an overruling central
government.
Tha Il fAr
In the different states, and brought out
a great diversity of opinion as to the
causes Of the distress and the efficacy of
the proposed remedies. Only two states
out of the thirteen-Connecticut and
Delaware-escapedt the infection, but on
the other hand, it was only in seven
states that the paper money party pre-
vailed in the legislatures North Caro-
lima issued large amount of paper, and,
In order to get it into circulation as
quickly as possible. the state govern
ment proceeded to buy tobacco with it,
paying double the specie value of the
tobacco. AS natural consequence, the
paper dollar instantly fell to seventy
cents and went on declining. In South
Carolina an issue was tried somewhat
more cautiously, but the planters soon
refused to take the paper at it's face
value. Coercive measures were then at
tempted. Planters and merchants were
urged to sign a pledge not to discrim-
mate between paper and gold, and if
any one dared refuse the fanatics forth
with attempted to make it hot for him.
A kind of "Kuklux" society was organ
ICED at Charleston, known as the Hint
Club" The purpose was to hint to such
people that they had better look out
In Georgia the legislature itself attempt
ed coercion. Paper money was made a
legal tender In spite Of strong opposition,
and law was passed prohibiting any
planter or merchant from exporting any
produce without taking affidavit that he
had never refused to receive this scrip
at its full face value. But somehow peo-
pie found that the more it was sought
to keep up the paper by dint of threats
and forcing acts, the faster it's value fell
Virginia had issued bills of credit during
the campaign of 1881. but it was enacted
at the same time that they should not
be legal tender after the next January.
The influence of Washington, Madison,
and Mason was effectively brought to
bear In favor Of sound currency, and the
people of Virginia were but slightly af-
fected by the craze of 1886. In Mary
land, after a very obstinate fight, rag
money bill was carried in the house of
representatives, but the senate threw it
out. Pennsylvania had warily begun in
May, 1855, to issue million dollars in
bills of credit, which were not made a
legal tender for the payment of private
debts. They were mainly loaned to
farmers on mortgage, and were received
by the state as an equivalent for specie
ir the payment of taxes. BY August
1886, even this carefully guarded paper
had fallen some twelve cents below par
not bad showing for such year as
that. New York moved somewhat less
cautiously. A million dollars were is
sued in bills of credit, receivable for the
custom house duties, which were then
paid into the state treasury; end these
bills were made a legal tender for all
money received in law suits. At this
same time the New Jersey legislature
passed a bill for issuing half a million
paper dollars, to be a legal tender in all
business transactions. The bill was We
toed by the governor in council. At the
next session the governor yielded and
the rag money was issued. But an un-
foreseen difficulty arose. Most of the
dealings OF New Jersey people were in
the cities of New York and Philadelphia
and in both cities the merchants refused
their paper, so that it speedily became
worthless.
Nowhere had the normal machinery OF
business been thrown out of gear so ex.
tensively as in Rhode Island and Massa-
chusetts, and in Rhode Island there was
the added disturbance due to prolonged
occupation by the enemy's troops. No.
where perhaps, was there larger pro
portion of the population in debt, and. in
these pre-eminently commercial com
munities private debts were a heavier
burden and involved more personal sui
fering than in the somewhat patriarchia
system of life In Virginia or South Car
DINA. In the crisis of 1856, the agita
ton in Rhode Island and Massachusetts
reached white heat, and, things wer,
done which alarmed the whole country
But the course of events was different il
the two states. In Rhode Island the agi
tators obtained control of the govern
ment, and the result was a paroxysm o
tyranny. In Massachusetts the agita
tors failed to secure control of the gov
eminent, and the result was paroxysn
of rebellion.
The debates over paper money in tn,
Rhode Island legislature began in 1856
but the advocates of sound currenc,
were victorious These men wer,
roundly abused in the newspapers, ant
in the next spring election most of then
lost their seats. The legislature of ITS,
showed an overwhelming majority in ia
vor of paper money. The farmers from
the inland towns were unanimous il
s a,-nnorfing the measure Thew could M