The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1896-08-15
LEGAL TENDER AND THE VALUE OF
MONEY.

10 the Editor OF the indianapolis Journal:
In your article entitled. Legal Tender
The Mexican silver dollar is a full legal
tender In Mexico, yet one can buy two of
them with a gold dollar This is true. but
can he not buy two of them with an Amer
lean silver dollar just as easily as he can
with a gold dollar? Now, Is it not the pur-
chasing power. the power to pay debts
with silver in this country, that makes 1t
current for a full dollars worth in Mexico?
| read your paper constantly. / am a
hearty and cordial Republican. and will
vote, If alive on election day. for the Re-
publican ticket. without a scratch. but 1
wish you would make your argument a lit
Indianapolis. Aug. IA.
There is some misapprehension as to the
meaning of legal terder.'' and still more
as to its supposed effect i'm adding to the
value of money. Legal tender legislation
does not create value. any more than con-
verting gold or silver bullion into coin adds
TO it's value. The making of any kind of
money legal tender simply means that it
can lawfully be used in paying a debt. 1t
is not intended to confer value. but to pro-
mote public convenience and facilitate bust
ness. Value must be earned, and cannot
be created. even by a great nation. In
colonial times tobacco was a legal-tender
currency in Maryland and Virginia, but
that did not add anything to the value of
the tobacco. So far as gold. the recognized
standard of the commercial world. is con-
cerned, there is no need of making it legal
tender. Men would take 1t by weight any
where. A recent writer says:
If governments would confine their legis-
lation to fixing by enactments the fine
nesses of the precious metals and the num-
Der of grains that shall constitute each
piece of a given size, they may safely leave
the maintenance of the coinage in its in
tegrity and the value of the pieces 20 be
regulated by individual interest and action.
Practically this point of monetary advance
ment has been reached by most OF the civ
comparatively harmless act of decreeing
that coin shall be a legal tender at its bull
lion value is manifested the extreme con-
servatism which still clings to the old de-
fusion that legislation may in some vague
sense regulate the value of coin.
Our law making gold coins full legal ten
der to any amount provides that they must
be of standard weight. If they have been
clipped or nave become light from wear or
any other cause. they are legal tender at
a valuation in proportion to their weight.
and no more. A twenty-dollar gold piece
tina is one grain light by the scales is le-
gal tender only to that amount. This
shows that the value and currency of the
coin depend on the metal that is i'm it. and
not on its Iegal-tender quality. The value
of silver dollars. as now regulated, depends
on the fact that the government credit is
pledged to maintain their parity with gold.
and that they are practically convertible
into gold through greenbacks. That it is
this and not the legal-tender quality which
keeps our silver dollars at par with gold is
shown by the fact that Mexican silver dol
lars, which are full legal-tender in that
country. pass only at their bullion value OF
% cents. Mexico is not as great a country
as the United States. but the Mexican gov
eminent is as supreme and has the same
power to create or confer value by legisla-
ton within its territorial limits as the gov
eminent of the United States.
The correspondent seems to confound the
purchasing power OF money with it's legal
tender quality. They are entirely distinct.
Legal-tender laws cannot compel a man to
part with his property for a debased cur
rency. and no man parts with his property
without knowing what kind of money and
how much he is going to get in return. The
important point to be membered is that 1t
is the government credit and the practical
convertibility of our silver dollars into gold
that maintains their parity. and not the le-
BARTENDER quality. Under free and unIim-
tied coinage of silver it would be impossible
to maintain this parity.