The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1896-10-04
FIAT MONEY WILL NOT 60.

FIAT MONEI WILL NOI <3O.
In principle the free and unlimited
coinage of silver by this country alone
at the ratio of IL TO l is simply a pro
ject for creating money that is not re-
deemable anywhere. or by any body,
at IT'S face value, and compelling il TO
pass current among the people BY the
mere legislative decree of the govern
ment- This idea has been tried many
times by different nations in the past
and has always failed.
| One Of the most famous experiments
| Of this kind was made by France a
little more than a hundred years ago.
The close Of the year 1850 found the
French revolutionary government in
| financial straits The cry was raised
In the national assembly for an issue
of paper money. Necker. an able and
| conscientious statesman. who was min
| lister Of finance at the time, opposed
the project, and predicted disaster II
! it was carried through But the dem
agogues prevailed, and the story Of
what followed is Interestingly told by
Professor Andrew d. White, formerly
president OF Cornell university, in q
little book Of eighty-six pages which
has just been published. The finance
committee Of the French assembly set
the ball Of fiatism rolling by a report
in favor Of a large issue Of paper
money. Some Of the language in this
report has a curiously strong resem-
blance to that which is now employed
by free silver orators in this country
1t appealed to the patriotism Of the
French people in these words: Let
Us show to Europe that we understand
our own resources: let US Immediately
take the broad road to our liberation,
instead Of dragging ourselves along
the tortuous and obscure paths of frag-
mentary loans" 1t closed by recon-
mending an issue of paper money, care
fully guarded, to the amount OF four
hundred million francs.
In April, 1890, this amount was is
sued in the form Of the celebrated as
signats. They were not based on any,
thing less valuable than the free sill
yer party proposes now to base an IN
limited issue Of dollars. The landed
estates which had been confiscated
from the church and the nobility were
pledged as security for the assignats.
These estates comprised about two
thirds Of the entire territory Of France.
No irredeemable currency has ever
claimed better guarantee for its
soundness and safety as a circulating
medium. 1t was secured by mort
gage on productive real estate of vastly
greater value than the issue The
notes bore interest at 8 per cent, SO
that there was every reason for their
being Withdrawn from circulate ton
whenever they became redundant, and
it was publicly proclaimed that they
would be so withdrawn. The first
issue of assignats was based, it is true,
upon the confiscated estates of the |
church only, but these amounted in
value to four billion francs, yielding
q yearly income of about two hundred |
million francs What could be better |
security, if any security at all could |
have been good except specie reserve |
pledged TO its redemption on demand. |
for the issue of fiat money TO the
amount Of four hundred million |
francs?
1t was not long after the first edi-
ton of assignats was printed before |
another issue was called for. Mira
beau, who had opposed the first issue,
came forward 10 eloquently advocate
was no danger that paper money would
become too abundant. because ii would
be absorbed in rapid purchases Of the
national lands Toward the close Of
bis speech. in burst of fervid oratory
be proposed that assignats should be
issued in sufficient quantity 10 cover
the entire national debt OF 400, 900, 900
francs predicting that permanent pros
perity would be thus insured 10 the
nation. Meantime, the first issue Of
assignats had not been kept at par
and were steadily depreciating. The
Necker opposed the sec
md issue as he had the first, but in
yain, and, resigning his post az minis
er of finance. he left France forever.
Then the infiationists had 1t all their
,wn way except for a few notable
protests. Talleyrand, for one, made
memorable speech, in which he said,
eferring TO the laws which made the
acceptance of paper money compulsory
lpon all citizens: You can, indeed,
orange it 50 that the people shall lie
orced to take a thousand francs in
,aper for a thousand francs In specie.
n that fact is imbedded the entire
question, and on account OF that fact
ne whole system fails"
Exacly in the same way the whole
ystem Of currency projected by our
wn free silver party would fail. Con-
ress can, indeed. oblige all the Amer
an people to take a thousand dollars
a silver coined at 10 10 1 for a thou
and dollars due for debt or for goods
urchased. but congress can never ar
ange Ii so that an American citizen
hall be obliged 10 give thousand
ollars in gold. worth 100 cents apiece.
Or a thousand dollars in silver worth
My SO cents apiece. and on account
Z that fact the whole scheme would
all. because we should simply drive all
ur gold out Of the country or into (,
idinz places within the country. and $
De silver dollars left TO rs could no r
,ore be made to circulate At par with c
old than the French assignass were \
lade 10 do 50 hundred years ago. Z