Herald and news. [volume] (West Randolph, Vt.) 1878-1943, 1896-07-30

/ Of the metals at that time was practi-
cally the same as the uncoined value
Of them, as it had been in all history.
That is, it was not considered that the
putting of the government stamp onto
piece Of metal of certain weight
added anything to its worth
Both gold and silver are needed for
currency purposes--gold for the larger
denominations which, II in silver,
would be too cumbersome. and silver
for the smaller values which gold cam
not well fill. There is also a demand
for sound paper currency, as consid-
cradle sums of money can be handled
in this form much easier than in silver
or gold. 1t is, however, in expert
menting with paper money that many
nations, including our own, have met
disaster. Inasmuch as paper money
cannot have value of its own except
by the questionable force OF the gov
eminent fiat, it would seem to be by
far the more prudent way to issue
paper money only as representative of
actual and nnquestioned value. We
mean it should be based on an cquiya-
lent of gold or silver deposited with
the government or else founded on Sc
curities of unwavering value, like our
Understanding government bonds.
Such is the nature of part of our
paper currency, but not all of it, as we
shall presently explain.
The experience of the American colo
nists with paper money during the rev.
olution was not encouraging to a con-
tinuancc Of such system. Having
little gold or silver. the Congress issued
about 5000, 100000 in paper which was
made legal tender for the payment Of
debts. Its current value speedily fell
until in 1871 it took a thousand dollars
of il to equal one dollar in gold Not
until the outbreak of the war of 1912
was there another issue Of paper mon
ey. This issue differed from the for
mer one in that il was for a short time.
bore interest and was not made legal
tender. Such currency is generally
successful Other issues of this nature
were made according TO the exigencies
of the government until 1862. On July
II, 1861, the large amount OF Sl59,-
999, $50 was issued, to run three years.
bearing z $40 per cent interest. These
sold slightly above par. But bank
rupt treasury and the pressing needs
of 4 great conflict made desperate
measures necessary and resource was
had to what is known as the green
backs, which were indeiinite-period
MISUNDERSTANDING legal tender notes
with the single exceptions that the gov
eminent did not consider them good
enough money to be receivable in pay
ment of duties on imports and interest
on the national debt. The amount Of
these notes issued was SI47 800, 203. !
These ereenbacks were regarded with |
distrust and the preference was for
gold which was at a premium of 100 |
per cent over greenbacks for some
time, that is, one dollar in gold would |
buy about two and half of green
backs, But there Is no question that |
these government notes served a use |
full purpose at the crisis in which they |
were introduced. They were of limit
ed amount and no one doubted they |
would be redeemed in good money if
he union survived, as, indeed, they /
nave been. No sooner was the war
over than steps We're taken to redeem
hem, leading up to their actual re-
lemption in gold and silver in 1879.
These notes had by this time become
80 valuable a part of the currency that
hey could not be spared and in 1878
| law was passed directing the trea.-
lrer not to destroy any ofthe notes
hat were redeemed, but to pay them
nut again, AT this time there were
'346,6Sl,0 l6 in greenbacks outstand-
No, and there has been no change
ince. In 1868, short-time interest
,earing legal tenders were issued to
he amount of S377 1895, 44o but these
ecame practically apart Of the nation
| debt. T:
The theory upon which governments
ase the issuance of paper money is
he same as that upon which private
arties base their promissory notes.
When this theory is strictly followed,
title trouble results. 1t is only when !
is departed from and governments
Undertake to create value that disaster
ONES. Governments usually own
urge amount Of valuable property and =