Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1896-10-08
A Lesson From History

cheap money made by the Swedish Gov
ernment early in the last century. The
article was written BY DR.. John A. En-
auder, whoes attainments as historian
have given him wide reputation, and
it is of especial interest just now because
it shows what did occur in Sweden in
the efforts to- float cheap" money and
what would occur in this country should
we undertake the free coinage of silver
at the fictitious ratio of IS to I. We give
below condensed statement of DIR. En-
ander's instructive article.
About the beginning of the eighteenth
century the wars of Charles XII. had
brought hard times to Sweden. The cir
culatiug medium of the country consist
ed of silver and copper. The largest coin
was the Swedish riksdaler, about the size
of our old silver dollar of 4I6 grains, but
worth two thalers silver or ;three thalers
copper. After I7IS it was worth three
thalers silver or nine thalers copper. In
consequence of successive alterations in
the quantity of copper with which it was
alloyed the silver thaler lad in the course
of $50 years fallen to third or fourth
of the value it had in 1874. This was the
condition of the Swedish currency when
Mr.. Gortz became Minister of Finance
a man whom Mr.. Enander describes as a
"sanguine, obstinate autocrat.
There was still considerable stock of
silver money in the country; but owing
to a lack of confidence it was boarded,
and little was in circulation. Mr.. Gortz,
like our Mr.. Bryan, conceived the idea
that Sweden could without waiting for
the aid or consent of any other nation, J"
establish financial system upon an in
dependent basis. He decided to rernint
all copper coin at an arbitrary and false
ratio in comparison with silver. The
copper thaler, he said, was the "money
of the poor" the debtors dollar" By
overvaluing it he thought the price OF the
bullion it contained would rise in the
market. At the same time it was claim
ed that by the depreciation of this coin
prices would rise, farm products would
bring more and industries would revive
so there would be a demand for labor.
The King did not believe in this fnan-
cial scheme of his Minister of Finance,
and it was only after great hesitation
that he signed the decree to carry it out.
The people soon gave the new thaler the
derisive title of Calamity coin" on ae-
count of the ruin it wrought. DIR. En-
ander says that not even Mr.. Gortz i'm
sgined that it would be possible to float
an unlimited number Of deprecated cop
per thalers. He was not as crazy as Bry-
an on that point. 1t was decided to
limit the number to two million; "but
once on the downward road no place was
found for halt short of the bottom OF
the precipice." By I7I7 there were 49,
ooo, 900 of these new thalers in circula-
ton and when Charles XII. died the next
year forty million had been minted, and
IS, 600, 600 were current. They were
made legal tender, and the law declared
two of them equal to silver riksdaler.
Then the silver money all disappeared
"as if by magic" says the historian
The new money would buy nothing ex-
cert at rainous rates. Every article Oh
fered for sale had two prices - one in
honest money and another in the new
cheap" money. Then decree was IS
sued against this double valuation of
goods, making it crime punishable by
4 fine of not less than four times the
value of the goods, and the result of this
was the immediate suspension of all traf-
ic, except in the primitive form of bar
ter.
Silver having been driven out of cir
,ulation by the cheap copper coin, the
Government issued decree thar all per
IONS in possession of silver, native or for
ign, coin or bullion, should forward the
same by July I, I7IS. to the treasury and
receive the new copper coin in exchange |
therefor, This caused an immediate ex-
of silver from the country al
hough laws were passed to prevent it.
The country had then total OF Gas,
1853, 900 copper thalers in circulation-cer-
ainly suficiency of CHEAP money
or a country like Sweden. But this
lbundance of debased coin brought only
alamity to the people and the govern
nent. The public debt had reached the
normous sum of 20, 100000 silver tha-
ers. and the Parliament that met in 1919
vas forced to consider means for getting
id of this debt.
1t was finally decided to begin by re-
Ieeming the calamity coin" at half
IS face value. Tie people were invited
o bring it to the treasury and exchange
t for silver a. the ratio Of I6 to I. The
in fact had no silver with
which to carry out its part of this prop
sition; but it returned to the owner of
ach thaler deposited the identical coin
eposited by him, which was thereafter
q be valued at only two silver ore, and
0 make up the difference, it gave him
aper money of the nominal value of
ourteen silver ore. Commenting on thi
nancial operation, the historian says:
"ouch of the Swedes as had by indus
ry and thrift accumulated small fund
nth which to support themselves in
heir old age beheld with dismay the
udden disappearance of one half of
heir small savings, while they felt the
ang of terrible douot as to the ulti-
late redemption by the Government of
he paper which it had issued and in
,hich their savings were invested. I'm
act, this doubt was justified. The Gov
rnment was not able to maintain the
redit Of either the paper it had issued
r of the money it had guaranteed to up
old at a deprecated valuation that was
till above the market value of the bull
on of which it was made. The net re-
ult of these operations was Govern
1ent disgraced and discredited and a
ountry reduced to poverty and distress.
Multitudes of people were compelled to
esort to beggary as the only means of
eeping body and soul together.